What to do with your bonus?
January is just around the corner and it can be a very long month if you do not consider using your ‘little bit extra’ money wisely.
DebtSafe suggested making wise choices when you receive your bonus.
The Debt Review company reminded South Africans that January is just around the corner and it can be a very long month if you do not consider using your ‘little bit extra’ wisely. They highlighted that you can either be a spender, a saver or a user, and asked which one you would rather be.
• The risky spender
It’s always fun to do a bit of splurging but, as you know, life is expensive and economic times are currently tough for South Africans.
DebtSafe therefore recommended that you only spend a little this December (and then only if you can really afford it). Rather spend a few bucks on that holiday that you need to pay off, instead of being a risky spender by spending all your bonus money on unnecessary, expensive items.
• The cautious saver
If you are in a position to save your entire bonus or have money left from your tax refund amount (after your necessary debt payments etc.), why don’t you save it?
Tuck your entire bonus or a part of your tax return into your rainy day/ emergency fund. Life happens and you never know when your ‘little bit extra’ savings may come in handy, especially when you really need it.
• The wise user
DeftSafe recommended using a bonus productively by paying off excessive debt. If you relate to this, there are two things that you can do:
1. You can either make use of the so-called snowball effect by paying off your smallest debt first (like a clothing account); or
2. You can use the avalanche method – where you use the money towards paying off the debt with the highest interest rate first, like your credit card.
If, however, you are already finding yourself in a discouraging, over-indebted scenario, contact DebtSafe to assist you with debt review, debt management or debt solutions services. Send your name and Info to 30898 (toll free).
