7 Smart Things To Do With Your Christmas Bonus

If you happen to be one of the lucky ones to get a decent-sized Christmas bonus this year congratulations! I’ve gotten them a few times over my career and I remember there being a lot of initial excitement. After the excitement has worn off my mind skipped to all of the wonderful, extravagant ways I could spend the bonus.

While that is all great and good, unless you are in a great financial state where this money is extra gravy, this could be a way to improve your financial situation and set you up for the future.

7 Smart Things To Do With Your Christmas Bonus | arelaxedgal.com

(This information is not meant to be financial advice and is just for educational purposes. This post may include affiliate links. Should you click an affiliate link and make a purchase I may receive a small commission at no extra cost to you.)

Here are some smart financial options for how to spend or use your Christmas bonus. Note, that they are in no particular order and should not be taken as personal financial advice.

1. Make an extra debt payment

If you’re like most people you probably have some type of debt. It may be student loans, a car loan, a credit card balance, a mortgage, or something else. When you have no debt you have more money.

Using your Christmas bonus to pay down or pay off a loan can remove some financial stress and save you money in the long run because the sooner you pay off the debt the less interest you pay. 
If you haven’t had the extra cash to pay off your debt or make an extra payment all year you can use your bonus to help with that. 

2. Add to your emergency fund

Another good use of a Christmas bonus is putting it towards an emergency fund. This way you know you have a little cash that's been set aside in case a financial emergency happens.

3. Add to your retirement accounts

As you may have heard many times before, the more you save now the more you’ll have for your retirement. Depending on the amount of your bonus you may want to put all or some of it towards your 401K and or Roth IRA. 

If you decide to do this, make sure this extra contribution doesn’t take you over your contribution limit for the year. You can see what the retirement contribution limits are on this government website or check with your financial advisor.

4. Invest in

If your retirement accounts are maxed out, you could look for other investments like a brokerage account with a diversified set of mutual funds. 

Tips for getting the most out of your Christmas bonus | arelaxedgal.com

5. Build a side business

If you have a side hustle as an online entrepreneur whether a blogger, designer, or consultant you may not have a lot of extra cash or want to spend a lot of your disposable income on your online business. Your holiday bonus may just be the extra capital you needed to pay for some tools or courses you’ve been eyeing for a while.

6. Give to charity

Instead of using it for yourself, you could give your bonus towards a charity or to help someone you know in need. As a bonus for your bonus if you give to a 501 c3 charity and don’t take the standard deduction during tax time the charitable donation could help lower your tax bill.

7. Take a vacation

Sometimes you just gotta get away for a little rest and relaxation and your Christmas bonus can help with that. Instead of dipping into your savings or vacation fund, use your Christmas bonus to pay for a trip whether a week-long full-blown vacation or a weekend getaway.

One of the Christmas bonuses I received was enough to cover the summer vacation I was planning. The bonus covered the majority of the cost so I ended up only using a small amount of my savings for the trip.

What would you do with a Christmas bonus?