I have never been in a place or position where I could receive a year-end financial bonus. Honestly, it's one of those things you think only exists in movies. But this year, I received one. Unexpected and incredibly generous, I came into a sum of money I could not have imagined.
Anytime I have come into unexpected money, I start conducting research. The Internet and numerous financial books are full of useful and often contradictory advice about what one should do with the year-end bonus. I like the idea of the 50/25/15/10 split: 50% goes towards debt, 25% goes towards emergency fund, 15% goes towards savings, and 10% is leftover for experiences that are fun and spendy.
Unfortunately, we are not currently in a position where this is a viable option. Maybe we will have the stability to indulge in such thoughtful spending in the future, but for the immediate moment, we need that bonus to go to work for us.
This means majority of my unexpected bonus is to be put towards temporarily stabilizing our current and upcoming expenditures. This month and next we have a number of sometimes unexpected and costly items that need to be covered. This month alone we have seen unexpected veterinary bills (oh, Homer) and had to replace all of the tires on our car after one died an irreparable death.
We do have a cash cushion and an emergency fund, but we also now have a way to preserve those accounts in case we met an emergency without other financial options.
In a single moment, the bonus--what at first seemed a happy, plump, endless affair--is spent and saved in Responsible Ways.
But I can never be too Responsible. I decided to take part of the bonus and buy myself a ridiculously good and horrifically priced ticket to the upcoming Cavalia show, Odysseo. I also (and how could I not?) bought myself a book (no surprise here). I decided on a photography book I would not be able to buy myself were I not suddenly in possession of gift money.
Both my husband and I found this a satisfying end to the bonus, which was here, gone, and left us in unexpectedly better financial, literary, and cultural places.
Squirrel and Nest offers one-on-one and small group financial counseling services that aim to give individuals the knowledge and independence they need to get their financial lives in great shape.