How to Handle a Raise or Bonus Money

December 3rd, 2009

If you are gifted with a raise or a bonus this holiday season, how will you keep from treating yourself or others to buying sprees or other indulgences?

Here’s a plan.

First, make a budget to live on at your current level of income. Make sure your budget has a plan to eliminate debt.

Second, include tithes, savings, and vacations in your budget. Even if the vacation is a canoe trip on a local river, budget for the picnic lunch you will bring or the lifesaving vest you need to buy.

Third, when new money in the form of a raise or bonus or both come your way, regard them as debt reduction instruments and savings. Do not treat yourself to new “stuff” unless the bonus is outrageously generous. Even then, make a plan to spend 1/3, tithe at least 1/10 and save 1/10.

No one says you have to stop there. You can tithe 1/2 and use the rest as a debt reduction instrument.

When your debts are eliminated, establish a future goal and then begin to save for it. Buying a house to rent out, saving for your children’s educations, and planning to be debt free as you age, are the best goals to have.

The only financial security you need as you age, is NO mortgage, NO other debt, and a place to live in that you can afford and that pleases you.

There is no other secret. Spend less than you earn and you will be financially secure for life.

Leave a Reply