What to Do With Bonus Money

[Medic981]

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@Anonymous wrote:
Double it at the Casino, then you can have emergency funds and a paid off loan, problem solved.

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Oldman, you always have the best solutions!!!

[Gmood1]

You asked "What to Do With Bonus Money?"

My simple solution is... just transfer it to one of my accounts. I got you buddy!😂😂😂😊😊
Sorry I couldn't resist.😉

[xaximus]

I'd put half in savings, half in the personal loan and then be aggressive in paying it off quickly. After that, build up your savings and have a separate fund for investments. Anything can happen in life, it's important to have backup funds available at any and all times.

[Anonymous]

If something happens between now and than I do have some funds saved but the worst case scenario I can use $13,500 of 0% interest.

Should I aggressively pay this down now before the bonus hits or should I save about $100-$150 a check and the rest goes towards the loan?

[Anonymous]

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@Anonymous wrote:
Greetings

I received a bonus this year and hit the next tier which would entitle me to $10,000 which will come out to $7,500 give or take after taxes. I’m undecided what to do with it but here is what I have going on:

$10,000 personal loan - Opened in August 2018; balance at $9,250. 14.4% interest on a 60 month term

Student Loans: $160k. I pay the monthly payment plus every dollar I make for my side job teaching college. I started this year and put in about $20k a year between both sources of income.

Credit Card Debt: $453.25 out of $30k limit. I PIF every month

Auto Lease: $451.67 a month opened December 2017 on a three year term

Savings: $3,500. Due to a cancelled wedding, medical expenses, family loan, and six months of waiting to start my job I burned through $50k of savings leaving me with nada.

My initial thought is I have a plan for the SL plus chucking the entire thing at it will be like pouring water into the ocean so I will leave that alone.

I was thinking of tossing the whole thing at the $10k personal loan. By the time the bonus pays out I would have a balance of $8k on it and can pay it off in one quick swoop.

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I'd say the biggest thing to look at would be what kind of emergencies could arise?  You say your job is secure so a lay off is probably not going to happen.  Your leasing the car so no unexpected car repairs should pop up.

Basically for emergenices then it narrows things down a bit to:

1) Do you have good health insurance?  Sick time saved up?  Short time Disability insurance from your employer? 

2) Do you own your home or are you renting (reason I ask is applicances / Heater / etc if they break are they your responsiblity to repair/replace)

Unless you have a major health issue and / or don't have good health insuance, I'd say $3500 should cover MOST things that might happen (broken fridge, a busted furnace, etc)

I'd say put it on the personal loan, then start putting more into your savings each month just in case something were to happen.  

[Anonymous]

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@Anonymous wrote:
Greetings

I received a bonus this year and hit the next tier which would entitle me to $10,000 which will come out to $7,500 give or take after taxes. I’m undecided what to do with it but here is what I have going on:

$10,000 personal loan - Opened in August 2018; balance at $9,250. 14.4% interest on a 60 month term

Student Loans: $160k. I pay the monthly payment plus every dollar I make for my side job teaching college. I started this year and put in about $20k a year between both sources of income.

Credit Card Debt: $453.25 out of $30k limit. I PIF every month

Auto Lease: $451.67 a month opened December 2017 on a three year term

Savings: $3,500. Due to a cancelled wedding, medical expenses, family loan, and six months of waiting to start my job I burned through $50k of savings leaving me with nada.

My initial thought is I have a plan for the SL plus chucking the entire thing at it will be like pouring water into the ocean so I will leave that alone.

I was thinking of tossing the whole thing at the $10k personal loan. By the time the bonus pays out I would have a balance of $8k on it and can pay it off in one quick swoop.

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The biggest thing I would look at would be what kind of emergencies could arise?  You say your job is secure so a lay off is probably not going to happen.  Your leasing the car so no unexpected car repairs should pop up.

Basically for emergenices then it narrows things down a bit to:

1) Do you have good health insurance?  Sick time saved up?  Short time Disability insurance from your employer? 

2) Do you own your home or are you renting (reason I ask is applicances / Heater / etc if they break are they your responsiblity to repair/replace)

Unless you have a major health issue and / or don't have good health insuance, I'd say $3500 should cover MOST things that might happen (broken fridge, a busted furnace, etc)

I'd say put it on the personal loan, then start putting more into your savings each month just in case something were to happen.  

[Anonymous]

Health insurance is OK. I have a $500 deductible and a $3000 out of pocket max which I met this year so everything I get done from now until January 31st is covered.

I also contribute 6% to my 401k. I have unlimited sick days but I have 20 days of vacation in the bank.

Currently renting and all repairs are done by the PM group. Including appliances and light bulbs.

The big expense would be medical but I’m at my out of pocket max already and have that saved already. Really just trying to save for emergencies and eventually a home.

[Thomas_Thumb]

Consider buying a low risk bond with a guaranteed fixed interest and two year maturity. Bond funds can lose value but with a specific bond you get your principal with interest if you keep it to maturity. Municipal bonds (in your state of residence) are often state tax exempt. I like the idea of putting bonus money into a Roth IRA where earnings growth is tax exempt. In that case, no point in focusing on tax exempt bonds. However, if you want to pull the money out of a Roth IRA without a penalty you have to wait 5 years.

A bond can default, so avoid junk bonds. Highly rated, secure, bonds have lower interest rates but you don't have to worry about default.

[Anonymous]

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@Anonymous wrote:
Health insurance is OK. I have a $500 deductible and a $3000 out of pocket max which I met this year so everything I get done from now until January 31st is covered.

I also contribute 6% to my 401k. I have unlimited sick days but I have 20 days of vacation in the bank.

Currently renting and all repairs are done by the PM group. Including appliances and light bulbs.

The big expense would be medical but I’m at my out of pocket max already and have that saved already. Really just trying to save for emergencies and eventually a home.

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I'd say in that case put it towards the personal loan.

[joltdude]

Like the idea of using a SSL to refi that high interest note... But also would like to see you shave off a little bit to add to your savings/emergency fund.... Wonder if theres a good way to do both... Seriously even just putting away 500 of this bonus somehow would give you would give you a few bills paid if feces hit the air oscillating device.... and if you could even squrrel away even a smaller amount even while paying down debt.. it does eventually add up...  Thought folks were odd when i kept hearing.. pay yourself first... but it can be done with not much pain... 

-J