It’s that time of the year where you’ve either received your bonus or have yet to in December. Of course, one’s natural inclination is to go absolutely bos with this extra money.
After all, you spend most of your year working hard to cover your living expenses and can’t help but feel as if though you deserve a little something, something – and you’d be absolutely right.
Making it to this point of the year is a victory – one where you should be allowed to employ that iconic “Treat yo'self" phrase and spoil yourself a little.
So the question here isn’t a matter of should you or shouldn’t you, but rather a case of how to spend your money and avoid being broke come January month (or as my family likes to dub it, Janu-worry).
Here are a few guidelines that could help you:
Structure your finances
Divide your budget into portions and separate it by necessities and wants. In fact, as a safety option, keep the money that you want to use for things like living expenses, debit orders for accounts and personal debts in an account that you won’t make use of.
Because many of us get paid a bit earlier in December, it can be easy to lose track of what needs to be deducted at the end of the month.
I tend to be a bit of a control freak in the sense that I always avoid spending money until all my debit orders have gone off, so it really helps to have a set amount put aside for those necessities.
It helps me set boundaries for myself.
Transfer any cash you’re planning on using for personal use over the festive holidays into an account where you have the option of withdrawing or swiping without running the risk of using any money that you can’t spend.
Pay off some of your debts - if you're able to
Look, I’m pretty sure most people would prefer not to have to be a responsible adult during the month of December (me included).
However, several experts in this Fin24 article on How you should spend your bonus money suggest that this time of the year is the perfect opportunity to, if not completely pay off your debts, then at least make a sizeable dent so that your future installments (depending on the account you’re paying off) will at least be a little lower.
Look at your accounts and start small – according to Fin24, store cards and credit cards are good short term loans to pay off first as the interest rates on those cards tend to increase by up to 20% annually.
Keep an emergency stash (not necessarily under your bed)
Similar to my first point, except this is the amount you want to have separated from any planned expenses on your itinerary.
So, aside from holiday expenses (including outings and getaway trips), gift buying, living costs and debt, having something set aside for unforeseen events or circumstances means you’ll be prepared for that sudden washing machine repair or car issue.
Lastly, splurge a little
Book that spa treatment, buy that outfit that you wouldn’t normally buy and treat yourself to that restaurant you’ve been meaning to try for ages.
While the aim is to make sure you spend your money without getting yourself into a fix, having a bit of balance and spoiling yourself should definitely be part of the package deal. After all, you deserve a few rewards for your hard work and for making it through the year.