A midsummer bonus: spending vs. saving.

I got a really great surprise with my last paycheque – a midyear bonus! Who-hoo!! What a fantastic way to start July, huh? I love that I work for a company that is willing to share profits with its employees throughout the year. Immediately after receiving the bonus, I’ve been mulling over what to do with my bonus. Here’s just some of things that came to mind:

  • Put some into my emergency fund (EF)
  • Make an extra mortgage payment
  • Buy a deck box
  • Buy new tires for my car
  • Use the money for my upcoming deck expansion
  • Use the money to get a will done

Unfortunately, my bonus isn’t big enough to let me do everything on my list. I would like my bonus to go as far as possible, so I’m going to try to do as much as possible with it. I have already set some money aside for my deck project, so there’s really no need to spend my bonus on that. I also ended up buying a deck box this weekend, when I found one on sale ($99) at Canadian Tire. I know, I know, I’m supposed to be on a shopping ban – but a horde of earwigs tried to move into the cushions for the deck chairs and it was frightening and gross. It was so bad, my Dad offered to buy me a deck box. My new deck box will hopefully keep my cushions earwig free.

That leaves: putting money into my EF, making an extra mortgage payment, buy new tires, or a get will. I’m leaning towards splitting the bonus in half and putting $500 into my EF and $498 against my mortgage. I’d love to get my EF to my goal of $10,000 and an extra $500 would put me closer to that goal. I figure I can wait on getting new summer tires for my car until maybe the fall and hopefully get some good ones on sale. As for the will, I know I should get one drawn up soon – right now I’m hoping it will happen in September. Being able to pay down some of my mortgage debt and get closer to a saving goal is really tempting.

What do you think I should do? When you get a bonus or some extra cash do you tend to put it into savings or spend it?

 

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Categories: Goals, Spending, Work | Tags: , , | 35 Comments

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35 thoughts on “A midsummer bonus: spending vs. saving.

  1. Congrats on the bonus! With my last bonus, I paid off the rest of my car. I did spend a lot of it though on things for myself 🙂

  2. Could you do two mortgage payments with it? That stuff acrues over time and you’d be closer to a time when you wouldn’t have any house payments and could put ALL your money in savings–wouldn’t that be awesome?

    Also-wtf is an earwig? That’s the funniest sounding thing I have ever heard of.
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    • If you have never heard of an earwig, you’re lucky. They are the grossest insects short of cockroaches.

      My bonus isn’t enough to make two full mortgage payments unfortunately. You’re right though – it would be so nice not have house payments and be able to save all that money.

  3. I would put it into your EF or split it between the EF and mortgage. I never told you but thank you for suggesting that I plant spinach. I did and its doing very well. I had a fresh spinach salad last night. Thank you.

  4. My vote is to put a little on the EF and the rest towards the mortgage. Saving and paying down debt at the same time. Always so. Ice to get a bonus.

  5. Emily

    I just got an honorarium check for working with a professional organization – Our plan is to catch up/get slightly ahead on a few bills, and hopefully tuck the rest into savings.

    I like the EF/mortgage split.

    Congratulations!

  6. Congrats on your bonus! I wish I got bonuses mid-year. I think funding your efund and making an extra mortgage payment would be the most beneficial.

  7. congrats on the bonus! My March bonus is being held until next year (you have to be here for a year before they give it to you but they do send you a slip with how much you will get!) and my Christmas bonus helped out at Christmas time. This year if I get one, I’m hoping to split it between efund and wedding or debt. And I’d do the efund and mortgage.

  8. Congrats on the bonus! Whenever I get windfall money, I always put it towards debt. If I were you, I’d use it to fund your efund and do a will. A will always seems to be the last thing to get done, so I think using that money would be a nice and painless way to check that off your list.

    • Thank you kindly! The will thing is weighing on me. I hate putting it off, because you just never know, right?

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  9. Wow, that’s awesome!

    I got a bonus in December and put it towards my credit card debt- and then promptly racked it right back up again. If I get another this year my debt will be paid off by then so I’ll probably put half into my savings, and contribute the other half to an RRSP.

    • Yep, I was pretty stoked to get it. Hopefully you get a bonus too – your plan for it sounds pretty smart to me!

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  10. The Asian Pear

    WOOT! Good for you. You deserve it.

    I always try to do 50/50. Save 50% or more. And some goes into spending. Something I want but was always too cheap to buy. 🙂

    • Aw, shucks – thanks. I figure 50/50 between my EF and mortgage is sorta like a 50/50 split between spending and saving. At least, that’s what I’m going to keep telling myself so I don’t go out and buy all the books I’ve bene lusting over 😛

  11. I’d say splitting it between the EF and mortgage is a good idea, though getting a will is important too. I don’t really think there is a wrong way to spend the money if you go with any of those three options.

    • Thanks. Yes, the will is important and I absolutely need to get one done soon. I should keep reminding myself about how hot my lawyer is and maybe that will motivate me to go see him again 😉

  12. Congrats on the summer bonus. It sounds like you work for a quality company. The companies I worked for would just keep the profits to themselves. I’ll add in another vote for splitting it between your EF and mortgage. When I get a lump sum of money like that I prefer to put it towards something useful like that before I have the chance to blow it.

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  14. I would say get new tires. If your current rubber is nearly done, then your personal safety is at stake! Having said that, new tires should ideally be built into your transportation budget so a bonus like this one could be used entirely for bonus purposes! (wheeee!)

  15. Cait

    I don’t get bonuses so, naturally, I’m a little jealous 😉 but I would say get new tires, if you really need them. Being physically safe is more important than being financially safe. And you’ll find lots of money to boost your EF and make extra mortgage payments, over the years.

  16. Congrats! I would split it between efund and mortgage payments.

  17. belowhermeans

    Earwigs are so creepy! I’d save it. I’ve never regretted saving money but have regretted spending it, even mindfully, so often.

  18. Rob

    I’d vote to pay down a bit on the mortgage if you can do it penalty free. It’s better than any investment return because the amount of interest that you will have saved (by reducing a portion of the mortgage principle) is guaranteed. Back in the day when I was your age and had a mortgage and an RRSP, I used to put extra bonus money into both – 50/50. It’s amazing what the effects of compound saving does over the years.

  19. I would split towards EF and mortgage…but I would also allow myself to have a little for fun money. You work hard and deserve a treat!

  20. Kay

    CG, You are being smart with that bonus money!! Way to go!

    What I do with my bonus?? take a small chunk 20% for splurging (good purchase, not necesaarily essentlal but will increase quality of life) the remn 80% goes into savings (RESP/RRSP) etc

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