Posted in Escape
What to Do with Your Annual Bonus
Before you splurge on a new phone or mid-winter vacation, consider this: You can use your annual bonus to kick start saving habits for long-lasting peace of mind.
Take advantage of autopay plus an online savings account
to stash cash for emergencies and planned expenses. First, save 10 percent of your pay in a pre-tax account for retirement. Then, divide as much as you can amongst the other categories:
Having a plan makes it easy accrue the funds you need to look good, stay sane, have fun and, ultimately, retire in style.
- Emergency: Experts recommend having six months living expenses set aside.
- Zen: This account is your go-to for what makes you happy—so you don't dip into your emergency savings for things like concert tickets or yoga classes.
- Celebration: Get holiday-, birthday-, and other special occasion-ready with a dedicated celebration savings account. Determine how much you want to spend, divide by 12, set that amount of money aside each month, and then implement smart spending techniques when spending season strikes.
- Vacation: Whether you're planning an overseas eco-vacation or a weekend hike, save accordingly to avoid a cash crunch.