I have received a Christmas bonus from work, and need advice on what to do with it.?

Question

First option is to put it all toward credit card debt. This is attractive because I would love to get rid of monthly cc payments.

Second option is to put it all in savings. This sounds good because I have not been able to save as much as I would like for an emergency. This would give me some peace of mind.

Third option is to pay it toward my mortgage and/ or home equity line of credit. I like this idea because when I sell my house, I can put more into a new one.

Fourth option is spend it all. Probably shouldn't do this, but it is an option

I do have a retirement plan at work that I have been contributing to for 4 years.

Answer 1

If you thought you could earn more than the 20% or so in non-deductible credit card interest running against you, option 2 would make sense. Otherwise, pay off the cards and cancel some to make sure you don't run them up again. Now, since you are disciplined to paying monthly cards and won't have to, sign up for savings at work if possible through the company savings plan or 401K. If neither exists, contact a reputable national broker like Fidelity, Janus, Vanguard or Franklin and sign up for a monthly automatic deduction from your checking account into several different mutual funds with different objectives. The market always does better than savings accounts over the long term.

Answer 2

If your credit cards are at a higher interest rate than what you would get in a savings account, then pay down your debt.

Every financial expert I've ever heard says that paying down your debt is the most important thing you can do. They also suggest that you maintain your credit card payments at the rate you are currently paying. That way, you will pay off the debts sooner and then can apply the money you paid on your credit cards toward paying off your home equity line of credit.

It's not always advantageous to pay off your mortgage. A tax advisor would be able to answer that part of your question for you.

Answer 3

Since it's a Christmas bonus, why don't you spend it on Christmas gifts for your friends, family and loved ones? I'm sure it would bring them joy and blessing in this Christmas moments, which some people dubs "the season for giving". You can also give 10% to the church as a tithe.

If you have something left by then, I would recommend putting it in savings, in case you will need it for something in the future, even for credit card payments or house mortgages.

Answer 4

How about investing it instead of savings. Put it toward a mutual fund, or open an account at Schwab or Scottrade and invest the money yourself.

I think paying down bills though is not a bad idea either.

Why not keep 10% to spend for yourself then invest the rest, or pay off bills. That way you have a little reward for yourself, but not spending it all.

Answer 5

is the bonus written in a settlement? If no longer then the determination could be in keeping with something. I labored for a extensive utility maker and that they gave all bonus, recommendations et cetera in keeping with defined critera that have been very clean. I left paintings to have an opertion and ignored 6 months entire and 2.5 months of the only financial twelve months and that i've got been given promoted on an analogous time as in well being facility. i did no longer get the bonus I envisioned. the subsequent FY I have been given the bonus I envisioned even tho I ignored 3.5 months. because of the fact the ignored time landed whilst it did i did no longer get the bonus I envisioned.

Answer 6

I was stuggling with the same thing but I decided to spend just a little on me, less than $100.00. I'm then going to put a nice chunck on my credit card bill and a couple hundred in savings. I've been hearing lately that paying down a mortgage on a house that you are going to retire in isn't the best idea anymore and your rate on your mortgage is probably lower than the rate on your credit card. Does your employer offer a retirement plan? Do you have a retirement plan in place? If you spend it all, your going to end up kicking yourself in the butt later on.

Answer 7

Pay down your CC debt. Unless you have a low interest rate, you need to pay down your revolving debt. If you can eliminate monthly cc payments, you can take that money and put it into a high-yield savings account once the debt is paid off. Try Emmigrant Direct or HSBC Direct.

Answer 8

Pay most of the cc debt and put the rest in saving. Now if I was your mother I would give you one more option: give it to Mom. LOL

Answer 9

Playstation 3

Answer 10

Pay your highest interest bearing account off first. This ultimately saves you money. If you save it you only gain the (probably) low interest minus inflation. Allow yourself to spend 25% of it. If its a bonus then have some fun with it too.