Tips to spend your bonus wisely

23 December 2016
A bonus at the end of the year is a pleasant addition to one’s salary, during a time when one spends the most money.
It can serve as the little boost you need to get you and your family through the festive season.
However, it is also easy to get swept up in the excitement and romance of the festivities, so much so that you do not account for any of your spending, and find yourself financially destitute at the beginning of the New Year.
“A lot of households are already experiencing financial strain, as a result of the adverse international and domestic economic conditions. Because your bonus translates to you having more money in your pocket, it shouldn’t translate to additional debt as well,” Standard Bank Acting Head of Marketing, Sigrid Tjijorokisa, said.
She advised clients to spend their bonus wisely and to make sure that the money works for them for an extended period, as opposed to just a few days or weeks.
Here are some of her tips on how to spend your bonus wisely this festive season:
• Before you start spending, you need to sit down and plan how you want to spend the money. You need to allocate your bonus into portions of how you want to spend it, be it on savings, a vacation or paying off your debt. Once you have allocated those portions, you need to stick to them, so as not to disrupt your budget.
•   If you can afford to, pay off your low-value debts. These can be your store cards, credit cards or even an overdraft. One or two less debts to pay, means that you have extra cash every month in the New Year, which you could use on more pressing needs.
•   Create an emergency fund. Accidents or illnesses occur without any warning and could set you back a few thousands of dollars. If you create an emergency fund, you will have an additional amount to cater for all those unplanned or unforeseen events.
• Pay your home loan bond with part of your bonus or all of it. Doing so reduces the overall interest that you pay in the long-term. Any extra money you deposit into your home loan immediately reduces the capital balance and saves you interest.
• Also set aside some money for January. It can seem like January has a 100 never-ending days, especially when you are strapped for cash. Make sure that when you allocate your budget, you set money aside to get you through January relatively stress-free.
• You’ve been working hard through the year so it is understandable that you would like to reward yourself. You are entitled to do so with your bonus, but just be sure that you do not spend exorbitantly and keep your spending reasonable.
•  Lastly, save or invest your money with Standard Bank. Savings normally turn into investments; because once the savings grow, the money can then be invested into other different investment vehicles, according to one’s risk profile, which can be determined with the help of an investment consultant.



The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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