While you may not be able to attend an office party this year, I'm hoping that your year-end bonus is still on its way. And for everyone reading this, I've heard that something fantastic is on the horizon.
But if you work for one of the 23% of businesses that will offer year-end bonuses in 2021, being strategic about how you spend yours is your best bet.
Here are a few good ideas, for what to do with your year-end bonus:
Eliminate high-interest debt.There's nothing better than beginning the New Year with a clear head and no debts on your credit card.
Invest it. Theres much to consider when deciding whether to invest it or use your bonus to pay off lower-interest debt. There's a case to be made for making all of your minimum payments and creating an emergency fund that will last you three months or more of necessary expenditures.
You can increase your retirement contribution for that earnings period, if the bonus hasn't yet arrived. It's a fantastic way to make what appears to be found money last longer. And while some employers don't match retirement contributions made with bonus cash, many do...so take advantage of it.
Donate. In addition to it feeling good, you can also get a deduction of up to $300 or $600 if you're married filing jointly.
Tips. An envelope with a thank-you note and $20 for the mail carrier may go a long way. The editor-in-chief of The Balance follows the rule of thumb, recommending using 2 to 5 percent of monthly rent as a starting point, with up to 10 percent in certain circumstances.
Treat yourself. There's nothing wrong with taking a little of your bonus and acknowledging the end of an undoubtedly difficult year. You've earned it.