My Husband and I Save His Bonus Instead of Spending It

Paid non-client promotion: Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate investing products to write unbiased product reviews.

Bạn đang xem: My Husband and I Save His Bonus Instead of Spending It

• When my husband gets his bonus, instead of spending it, we put it in savings or a retirement account.
• By being careful with our money at the end of the year, we avoid having to use it to pay off debt.
• We’ve been happy to reap the rewards of saving bonuses, and it makes saving all year easier.

If you got a year-end bonus, you may find yourself in a similar situation as our family, in which you obtain an additional lump sum at the beginning of the new year. While it can be tempting to earmark this money for a particular project or other expense, take a trip, or go shopping, it’s also possible to put this money into savings to jump-start your new year’s savings goals.

My husband typically receives a bonus for his sales job each year. While I would love to spend that extra cash on a vacation or home improvement project, we instead throw that money into either our high-yield savings account or one of our Roth IRA accounts.

By treating this money as if it doesn’t exist, we can save versus having already spent it in our minds. We don’t plan to spend it, making the act of saving much easier. If you’re used to spending every dollar you earn, this can be a tricky mindset to adopt, but once you do, it will be easier in years to come.

How we manage our budget

Xem thêm : Ameriprise, LPL go to FINRA arbitration in recruit dispute

One habit we have that makes this possible is paying off our credit cards in full each month. If we didn’t do this and accrued debt as the year went on, we would have to use that extra money to pay off debt.

Previously, we have used Mint to set up budget categories and track our expenses, but there are many ways to manage money. Some people prefer the cash envelope method, while others like to do it by hand in a notebook or planner or track it on an Excel or Google spreadsheet. There are plenty of budgeting apps out there to choose from. It doesn’t matter which option you choose, as long as it helps you spend less than you earn.

Compare Today’s Rates

Another habit we have adopted that helps us avoid end-of-year debt is not to overdo it on Christmas gifts. Years ago, we did a “no-gifts Christmas,” significantly reducing the number and cost of gifts we gave that year. Since then, we have kept up with that attitude, only giving an experience gift to our niece and nephew and limiting the number of gifts we give our children.

This helps ensure that we give intentional gifts and automatically force ourselves to create memories with our loved ones versus buying unnecessary gifts. This attitude has helped us ensure we don’t have credit card debt to pay come January, allowing us the flexibility to save more.

Watching our money grow is rewarding

If saving or investing is new to you, know that as you make it a habit, it’s easier to continue. Seeing a chunk of money in a savings account or investment vehicle, such as a Roth IRA, is rewarding. If you have yet to set up a savings vehicle, you can do so through a bank or credit union in person or online.

To start investing, you can look at those options or an online investment platform like Fidelity or Vanguard. Depending on your income, setting up a Roth IRA shouldn’t take long, and you can start funding it as soon as you have it set up.

Xem thêm : 10 experts predict what’s next for investing in 2025

While it may be too late to save or invest this year’s end-of-year compensation or bonus, depending on your current financial situation, it’s never too early to plan for next year.

If you want to save your bonus, the first step is opening up the vehicle you’d like to use, such as a HYSA or Roth IRA. Ideally, you should automatically direct a little from each paycheck or month into these, watching your money grow as the year progresses. This will increase your motivation and make sticking to saving and investing more accessible.

From there, set up a tracking or budgeting system that works for you to determine how much you can afford to save and increase this amount over time. This will ensure you aren’t spending all your money and prevent debt from piling up. By the end of the year, you’ll be in a good financial position to save that end-of-year extra cash.

This article was originally published in January 2024.