Efficient Group Chief Economist Dawie Roodt says that how to use your Christmas bonus is the wrong question to ask.
Recipients of Christmas bonuses somehow expect to be so cash flush as to be at a loss on what to do with all this money.
A question like this is a sure sign that somebody is in real need of good financial advice.
A bonus should never be seen as guaranteed.
In fact, a bonus must always be treated as an unexpected windfall.
Like any other unexpected financial development, a bonus must be treated within the rest of your family plan.
A family plan consists of things like a general plan for your family’s finances like a budget and a retirement plan.
Included in your budget must be a provision for unexpected expenditure items.
Also, your planning must include your expected holiday expenditure and all other items you consider necessary for you and your family over the next few years.
Usually such a plan will clearly show that once you have set aside money for normal day-to-day expenditures, the retirement plan and a nest egg for unforeseen expenditures, there is very little left.
In fact, the wish list is usually much longer and more expensive than the potential income.
Should an unexpected windfall in the form of a bonus come your way, there will be no need for you to agonise on how to spend this money. Just stick to the plan. Go down the wish lists after making sure the other items are covered and go for the next nice thing. So, the first step is to have a plan and only after you have every family member’s buy in, and you have successfully implemented your plan, will you be in a position to decide what to do with your bonus.
Details: Efficient Group info@efselect.co.za, 012 460 9580.
