Yeah! It’s the time of the year where people have already planned (and went) their holidays, made out a long list of items to buy (to pamper themselves or just anybody in mind) and collecting their well deserved bonus!
And in the usual Financial Planning sense – if you are one of those who are fond of spending away your bonuses (without even thinking and planning), here are a few tips that you may wish to consider to do so first before happily spending (or wasting) it away…
Note: the tips here are meant for your own good and really to help you with your future. Tips mentioned here are not in order of priority as well.
Five Good Tips To Help You With Your Year-End Bonuses
#1 Think Of Your Previous Purchases (Pampering)
Throughout the year, there have been many various types of sales events and the ease of buying things online has even became easier. If you have made your purchases during those times – it’s time to hold your expenses and think twice before spending your bonuses away. You may wish to consider saving a major bulk of it. If you find it hard to do so, just tell yourself you may get to spend a bit more from this saved amount in next year’s sales events.
#2 If You Have A Family – Teach Your Children The Importance Of Saving
It’s quite common for children to follow their parents, when they grow up, in terms of how they spend and how they save.
And if you do have children who are in this stage of learning, you can teach them the importance of saving. Here’s a good suggestion to help you make better use of your bonuses – do a one-to-one matching to your children’s saving for that year.
E.g. if your child is able to help $10 – you can do a match by contributing another $10 to the account. Likewise to show that you are capable of saving as well, you can share with your child that you are going to save a $xxx to your own bank account.
Make this a habit or challenge for each year – and at the same time, you can share the small benefits of saving – getting interest from the bank (though not that impactful) and see how the account slowly grows as you save.
#3 Donate For A Good Cause
I believe in what comes around goes around and with the fact that there are many other people who are less fortunate than most of us, a small donation can help them (and even yourself).
If you are new to the idea of donation, you may wish to know that doing a donation to some charitable organisations can help you to enjoy some tax relief.
#4 Top Up Your CPF And SRS Account
If you feel that you are not doing much to help yourself during your retirement period, it’s never too late to do so. One good way is to top up your CPF and/or SRS Account. Though the money may be “locked” for years, it’s still a good way to help your money to grow especially when the interest rates on the Ordinary and Special Account are so much higher than the normal saving interest rate.
Topping up your SRS account will help you to reduce the amount of tax payable, and save you from nasty shocks when completing your free tax prep software.
#5 Set Money Aside For Small To Great Causes
This is a good month for you to consider setting money aside – you can consider using your money to:
- Start an Endowment Plan
- Start a Regular Saving Plan For Stocks/Unit Trusts (though the current economic market may not be favorable)
- Upgrade your Health Insurance – consider adding a Rider
- Look into Accident Plans
- Have a Big Dream – saving for your first or additional private property.
- Have a Bigger Dream – consider setting up a small business
- Consider becoming an (angel) investor
There are many other good areas to consider on how to better make use of your year-end bonuses. If you have some good suggestions you may wish to share them here.
For those who have already received your bonuses (and if there’s still some left), hope you can consider some of the tips here. For those who are still waiting, you may take this time to plan something for yourself!
Meanwhile – enjoy your December!