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Great Ideas on What You Can and Cannot Do With your Year-End Bonus

What could be more rewarding than the satisfaction that comes with knowing your efforts throughout the year have paid off and you have that highly coveted end-of-year bonus? Even so, unless you are smart enough in the choices that you make with your year-end bonus, you may end up in more financial trouble than before. For some people, the year-end bonus is a great boost for retirement and emergency funds investment, and this can be a good choice for you as well as long as you choose the right investment plan. The following are some basic ideas on how you can make good use of your year-end bonus.

Most people with fewer expenses to think about will throw in their salary bonus into their 401(k) retirement plan. How about you make it a habit, then that each time you get some extra cash such as the year-end bonus you add some to the retirement plan and track it down from your payroll template? Closely related to the 401(k) plan is to check on putting up a ROTH IRA retirement savings plan as well. Find a website that will show you how to make this your main retirement fund and then complemented by the 401(K) one. The other smart decision you can make with your salary bonus is to pay off some of the many debts you have accrued over the months. This will not only improve your credit rating but will also give you more opportunities for better investments in the future. The other viable way to make good use of your salary bonus is to put it into an emergency fund account for a rainy day in case you have a medical emergency, job loss, loss of vehicle, etc.

On the flip side of the coin, you should never gamble with your year-end bonus. You have to work at ways through which you can build a lifestyle with better control over your odds and great returns for your hard-earned cash. That is why it is highly recommended that you read a lot here on retirement plans and savings for a rainy day. Year-end bonus is also not cash that you will use to buy electronics. We all know the high depreciation rate of these items meaning you are likely to lose at least half of your investment within the next couple of months.

Be wise when the year-end bonus comes in, and you are tempted to be extra generous with gifts for the holidays. It is OK to gift your special loved ones, but not at the expense of having your entire bonus finished on gifts alone. There are so many ways you can make good use of these rare treats at the end of every year.