Use your bonus wisely...

Receiving your annual bonus is one of the best bits about this time of year, but this extra cash seems to just disappear far too quickly and without any of the benefits it promises. How can you get the most out of your 13th cheque?

1. Save it up

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You should make a habit of saving some of your income,
including a portion of your bonus, in a long-term savings account. Whether it’s intended for an
expensive project such as building an extension to your house, putting a down-payment on a new home, putting in a swimming pool, a costly one-time event such as a wedding, or simply as a nest egg for your retirement, saving for the future is always a good idea. Well, for starters, don’t waste it on impulse buys. Take a step back, give yourself some time to consider the various options available to you, then make an informed decision. Here are 10 suggestions that might help you in the process.

2. Start a rainy-day fund

If you haven’t already established an emergency fund, now is the time to do so. Put some of your bonus away into a safe, high-interest bank account. Then, when your geyser bursts or your car needs to go in for an unexpected overhaul, you can dip into your back-up finances rather than going into expensive new debt. Ideally, you should have the equivalent of between three and six months worth of your living expenses available in the emergency fund. Use part of your bonus to help give you and your family that security cushion.

3. Buy the things that you need

There are many ways in which you can spend your bonus cleverly, for example by buying staple groceries in bulk at discount prices.
If you use your 13th cheque to rep lace your old geyser with an efficient solar water-heater, you could reduce your monthly electricity bill by as much as 40 percent. Make a list of things you need most urgently, like a new washing machine or school clothes for the kids, and arrange them in order of priority. It’s not a bad idea to spend at least some of your extra cash on these important expenses.

4. Clear your debt

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Start the year free-of debt by using your bonus money to get your outstanding accounts out of the red. Tackle the debt with the highest interest rate first — any overdue amount on your credit card, for example, is likely to cost you dearly in interest payments — and work your way down from there. This is probably the wisest way to spend your extra cash. Settle your debts with retail stores, and if you’re in arrears with your utility bills, like electricity, water, property rates or telephone accounts, pay these off as well to avoid having the services cut off.