If you are using The Budget Binder, you should have your budget established for at least the next 3 months (I do every 6 months myself). But what should you do when you get a bonus at work? Here are some ideas/recommendations.
The Expected Bonus
Never, ever, ever, ever, ever (can I stress that enough?) count on a bonus to cover necessary expenses or bills. A bonus is just that, a bonus. There is no guarantee that you will receive one and if you include it in your family’s monthly budget and you either don’t receive it, or it is less than you expected, you will find yourself in financial trouble.
However, if you are expecting a bonus, sit down with your spouse and map out where you want this money to go before it even hits your bank account. You need to always have a plan for your money, even if it is a bonus.
The Unexpected Bonus
Just because this money was unexpected does not give you the excuse to blow it on frivolous things. Before you spend a dime out of the bonus, sit down with your spouse and map out exactly where you want this money to go.
What To Do With The Money
Here are a few suggestions on what you could put this money towards:
- If you have not established a $1,000 emergency fund, put it towards that. You must have an emergency fund before you do anything else.
- If you do not feel like you are doing well with your budget and you feel like you just can’t get ahead, take the entire amount of the bonus and put it in your checking account. Then print out at least 6 copies of the Bi-Weekly Budget Worksheet. Record your bank account balance as income in the first section as well as your paychecks for this time period and redo your budget. This lump sum will help you get your bills on track where you are paying all of them before the due date, instead of during the grace period.
- If you are in credit card debt , put it towards your debt. Don’t forget to record it on the Debt Tracker worksheet.
- If you are saving towards a large expense (such as a new house or a 3-6 month emergency fund), put it towards that.
- If you need to purchase new items (such as a new fridge, a new wardrobe, etc) that you do not normally have the room in your budget for, put it towards that. However, make sure you list exactly what items you want to purchase before you go to the store and stick with your list! Also shop around and make sure you are getting the best deal. Just because this is bonus money doesn’t give you the excuse not to be a smart shopper.