THE year is almost over, and many hardworking citizens are looking forward to their year-end bonuses. While some may receive one as a 13th cheque, others would pocket a certain percentage. Either way, the tradition remains the same, spending and more unchecked spending.

The common route is spending the windfall on vacations, entertainment, personal grooming, home renovations, new vehicles, feasting and clothing sprees. The list is endless. However, experts caution against this costly trend, advising on more saving and debt settling.

Spending the money before it touches ones bank account, is to be avoided at all cost. This is because the bonus may not be guaranteed. Once, the money is received, experts shred the myth of extravagance and frivolity, and advise on avoiding impulse purchases.

Also read: How to prep your budget for the approaching holiday season part one

Personal finance expert Warren Ingram cautions against spending the whole bonus in unproductive ways, and rather adopting a balanced approach.
“It is advisable to divide the lump sum into 12 months, to see one throughout the coming year, and treat it as an added month’s salary. To those who rent properties, they may look into paying the rent ahead, while homeowners can take the bonus as an opportunity to also do so or keep up-to-date with their levies.

“Parents of school-going children can use the windfall to buy stationery, uniforms, and school fees. An even wiser option would be to settle the school fees for the year ahead. This gives parents more breathing room in the new year, explained Ingram. This is more useful in environments of uncertain job security.

Also read: Top holiday budgeting tips for single moms and dads

Paying off loan sharks and credit card settlements are high on Ingram’s list. “The bonus can be used to extinguish those debt fires. Where high interests are eating up, pour a big part of ones bonus to the capital amounts. If one is not highly indebted, it is a good decision to bulk the emergency fund, tax-free savings or retirement contribution.”

Spending should be guilt-free. A little bit of fun after catering for the expenses and necessities, a reward for hard work, is a good motivation and recharge for the coming year.

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