9 Ways to Use Increments and Bonuses to Boost Finances Wisely This Year

9 Ways to Use Increments and Bonuses to Boost Finances – If you’re expecting a bonus or increment in your salary, then you should think carefully about how to use it wisely before it arrives – because bonuses and increments tend to disappear just as quickly as they come. 

Use these 9 tips to help you manage your finances before and after the arrival of your bonus or increment this year so that it won’t just be gone with the wind!

9 Ways to Use Increments and Bonuses to Boost Finances Wisely This Year

1) You Can’t Handle It All

You’re working hard, and you deserve it. But if you want to reach financial security, learn how to manage your money wisely. Consider using increments (a small amount taken out of each paycheck) as a way to save more toward retirement. And if your employer offers a matching contribution program, take advantage of it by contributing at least as much as they do. 

Your contributions are matched dollar-for-dollar on the first 6% of income that is contributed. Save even more with bonuses: If you received a bonus this year, use it for something that will help increase your wealth over time. 

The best investments for your bonus might be in mutual funds or index funds, which are typically low-risk but provide high returns over time because the holdings are diversified across many companies and sectors.

Also, Read – 6 simple (and effective) ways to rebalance your mutual fund portfolio

2) Don’t Forget About Savings

Especially during the holidays, it’s easy to spend all of your money before it’s even in your bank account. To avoid this, set up a savings account with an increment or bonus that you can’t touch for at least six months. 

The temptation will be less if you know that every dollar is going into savings. If you’re saving for a big purchase like a car or house, try making small purchases instead, like furniture or decorations. Once you’ve saved up enough money, there will be no more excuses not to buy what you need!

3) Budget For Habit Purchases

Budgeting is important because it helps you save money. It also ensures that you don’t spend all your money on non-necessary items, like too many coffees or fast food lunches. 

But how do you budget for habits? The answer is by using increments and bonuses to boost finances wisely this year. Here are some budgeting tips:

  •  Budget for one big expense each month. For example, if you’re saving up for a car, make sure your car fund is a priority in your spending plan. If that seems too overwhelming, try setting aside $50 per week until the goal is met—a little at a time goes a long way!
  • Put what you want before what you need. Put any increments and bonuses towards the things that matter most to you. 3. Spend less than what you earn every month
  • Track your expenses for six months with Mint or You Need A Budget
  • Set a monthly reminder to review your bank account balance so nothing slips through the cracks
  • Automate bill payments so they go out automatically without having to think about them
  • Schedule three automatic withdrawals from your checking account each month
  • Put away 10% of your income into savings every paycheck (this is called paying yourself first)
  • Keep track of where every dollar goes with our Personal Finance Tracker

9 Ways to Use Increments and Bonuses to Boost Finances Wisely This Year

4) Automate Some Decisions

It may seem counterintuitive to use increments and bonuses wisely when they’re easy to come, and easy go. But automating some decisions can be a sound strategy for making sure you don’t overspend. 

For example, you could set aside your salary increments in an account every month so that you won’t feel tempted to spend them on something frivolous. 

The same goes with any bonuses—automate payments into savings or retirement accounts so they aren’t tempting you all year long!

5) Prioritize Your Bills

  1.  Pay off high-interest debt.
  2. Invest in an emergency fund.
  3. Contribute to your retirement account.
  4. Purchase disability insurance if you don’t already have it.
  5. Cover the basics: mortgage, utilities, groceries, and gasoline for the car.
  6. Save for a down payment on a home or for a major purchase such as new furniture or appliances for your home.
  7. Set up automatic payments from your paycheck or bank account so that you don’t miss any bills due on the same day each month (e.g., the mortgage payment on the 1st of every month).

6) Treat Yourself (Just Not Too Often)

Now that you’ve had a chance to take care of some of your long-term goals, it’s time for you to think about treating yourself. 

It’s important not to go overboard, though. If you use your bonus or increment on anything other than something practical, it may lead you into debt. Instead, consider using these nine ideas:

  1. Stop at Starbucks on the way home from work one day a week instead of two.
  2. Go out for dinner with friends once every two weeks instead of once a week.
  3. Buy new sheets or other bedding that you’ve been wanting but were holding off on getting because they’re expensive.

7) Have Fun With Stretching Goals

It’s time for the new year, and if you’re anything like me, you’ve been waiting for the perfect moment to set your new year’s resolutions. 

After some reflection, I realized that one of the most important things I can do is make a plan for my finances. I’m also realizing that there are many ways that I can use incremental increases as well as bonuses from work in order to achieve my goals. 

For example, I just received a Christmas bonus at work, so instead of spending it on something frivolous or saving it entirely, I’ll use the money to pay off credit card debt.

8) Use Partial Payments to Pay Down Debt

Paying down debt is one of the most important financial goals, but it’s also one of the hardest to stick with. It can be so hard because you’re delaying instant gratification for a goal that seems so far off. 

9 Ways to Use Increments and Bonuses to Boost Finances Wisely This Year

One way to help yourself stay motivated is by using partial payments when you have extra money. For example, if you get a bonus at work or some other windfall, put just half of it towards your debts. 

The rest can go towards something fun, like eating out for dinner or buying new clothes for work. You’ll still enjoy the reward without feeling guilty about spending it on something other than your debt repayment plan.

9) Spend on Rewards Instead of Investments

Instead of overspending on investments, treat yourself by getting something you want. The holidays are just around the corner! If you’re feeling generous, you can also donate some money or goods to charity. You’ll feel better about yourself in the long run, and it’s a great way to give back. 

The next time you get a bonus or increment, consider putting some of your new income into an investment account with low-cost funds that invest in stocks, bonds, and other financial instruments. 

Put Some Away for the Future: It’s important to set aside part of your income each month for future use. For example, saving up for an emergency fund so that you won’t have to take out high-interest loans from your credit card if something goes wrong with your car or home.

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