Bankrate has surveyed the industry and lists the top CD rates. Have you always wanted to go to Paris? You could also use your bonus as a down payment — or maybe a full payment — on your next vacation. Then also consider opening a travel rewards credit card to help take the edge off costs and stash away that extra bit of rewards. The point of deferring your bonus is to push any tax payments on it into the next year. So if you usually receive a bonus in December, you might be able to push it a few weeks, if you ask your employer.
If your income might be less next year, you might be able to push the bonus and pay less overall tax on it. Regular bonuses are a great year-end treat, but Keady warns that becoming too reliant on your annual bonus can lead to trouble down the line.
It makes a lot of sense to use that extra money to do something that improves your future, reduces your stress around your finances and makes you feel good, too. How We Make Money.
James Royal. Written by. Bankrate senior reporter James F. Royal, Ph. Edited By Brian Beers. Edited by. Brian Beers. Brian Beers is the senior wealth editor at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Share this page.
Bankrate Logo Why you can trust Bankrate. Bankrate Logo Editorial Integrity. Key Principles We value your trust. Bankrate Logo Insurance Disclosure. Read more From James. You may also like The 9 smartest things to do with your year-end bonus. Get a cash gift for Christmas? Now, if you are dealing with high-interest debt, like credit card debt, yes it may make more sense to use the bonus to pay off that first. Same if you have trouble with day-to-day expenses or any emergency repairs on your home.
The future value of your bonus can go a long way to reward your future self for all your hard work and smart planning. Ingrid Macintosh has spent her three-decade career working on all sides of the investment industry, institutions, advisors and investor alike. The information has been drawn from sources believed to be reliable. Where such statements are based in whole or in part on information provided by third parties, they are not guaranteed to be accurate or complete. The information does not provide financial, legal, tax, or investment advice.
TD Wealth, The Toronto-Dominion Bank and its affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment.
The information does not provide financial, legal, tax or investment advice. Also, if you don't have a home equity line of credit, get one. It can help provide short-term cash to cover any major expense not covered by your emergency fund. Knock off a chunk of high-interest rate credit card debt and amounts owed on home equity lines of credit, especially if any new debt was incurred to pay for holiday expenses. Interest charges alone can eat up hundreds of dollars each month, sucking money out of your paycheck and leaving less for essential expenses.
Begin allocating enough money for 's big-ticket expenses, such as property taxes, home improvement projects and vacation plans. You don't want to get in a cycle of borrowing to pay these bills. Once you know this number, take advantage of your bonuses to help attain that goal. Keep in mind that your annual savings goal includes any amount you've contributed to a k plan.
It's also important to also explore investment options outside of the k — whether it's an individual retirement account, Roth IRA or a taxable investment account. In some cases, there may be an opportunity to contribute to a Roth IRA, which has tax-free growth.
As tuition costs climb, saving early by starting or contributing to a college education savings plan is one of the most important decisions any parent can make.
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