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ask the readers: what should I do with my bonus?
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So, I came back from a business trip to London the other day, to find a letter from work waiting for me. Naturally, I instantly assumed that they’d twigged that I’m an imposter and I would be getting the sack. Not so. I’ve been awarded a discretionary bonus of £500 (approx $1000).Now, get your thinking caps on as I have two questions for you all.
Firstly, should I mention it to my team mates? I don’t think these are commonplace. No one in my team has ever celebrated having one before. We regularly celebrate promotions, birthdays, babies etc etc with cakes. So, should I keep quiet about it, or buy them all cream cakes? If they are more common than I think, then no one celebrates them and I should definitely keep quiet. On the other hand, do people really want me to gloat if they’re quite rare?
Secondly, and perhaps more importantly, what should I do with the money? After tax and NI I reckon it’ll amount to about £300 (approx $600). To help you get some ideas of my financial position:
- I have no consumer debt (although I do need to rearrange some savings).
- I have a reasonable sized emergency fund (about 3 months income).
- I’m currently investing 16% of my gross salary towards the future (retirement and whatnot).
- I’m saving the money I get from adverts on plonkee money towards buying an oboe
I don’t think I’ll get the money until at least my next pay packet at the end of the July, so there’s some time to think about it. This is good as it helps to mitigate against the possibility that I’ll accidentally fritter it away.
Over to you, give your opinions in the comments.
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18 comments for “ask the readers: what should I do with my bonus?”
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1) I wouldn’t mention it. Putting myself in your colleagues’ shoes, I would only feign excitement over the situation. If I didn’t get one, first on my mind would be, Why?
2) I’m a big proponent of ‘unsexy personal finance’. When I got my bonus a few months ago, I put half straight into my ISA and the rest into my high interest savings account.
Of course, if I were saving for something (like an oboe, say!), I would probably buy it with the discretionary bonus as a present to myself.
But then what to do with the money I was going to save to put towards this item (or the money I wouldn’t have to enter into my ISA/savings accounts)? I would simply increase my investments for the year.
Boring, but the truth!
Have you opened your ISA for this year? If not then I would do that as the market is so low, its like getting your investments on sale!
Nah, don’t tell them. Worst case is someone resents you for it. I think you should probably put half of it in the oboe fund and frivolously spend the other half taking friends out todinner or something.
I can’t believe you will lose 40% off the top to taxes!
I definitely would not tell co-workers. They might think you are sleeping with the boss or something.
If it were me I would a) not tell colleagues, b) put most of the money toward debt (student loan or mortgage) and a small amount toward something more frivolous that I would not otherwise buy (in my case, maybe a vintage typewriter).
@rocketc:
Basic tax rate is 20%. National Insurance is 11% (equivalent of Social Security). Student Loan (income dependent collected via tax) 9%. If it weren’t for my student loan I would be taxed at about the same rate in the US.
I wouldn’t mention it to anyone- take a moment to revel in the fact that you are obviously awesome at your job, then put it towards your oboe or your next holiday!
Like everyone else, I think I would keep quiet about it in regards to your colleagues. If no one else has received a similar bonus it could cause some really awkward/hard feelings.
As far as what to do with the money, I think you can be responsible and fun. Put part of the money into savings and spend part of something fun! Congratulations. Whatever you decide to do with it, an unexpected windfall is always nice.
I’d not say anything to your colleagues (maybe thank your boss if you have a 1 on 1 catch up with him/her on a weekly basis or something?
I’d put the whole lot into the Oboe Fund personally, everything else is on track financially for you so treat yourself!
Since there’s no promotion involved I wouldn’t celebrate it with coworkers.
Personally, I’d put some of it towards the oboe (maybe half?) and the rest towards Egypt!
Since you’re already on top of things financially, it makes sense to use this money for awesome fun.
I’ve been reading your blog for a few days now through the M-Network so this is my first comment.
Personally, since I am still paying off debt, I would put it towards my debt. However, since everything is financially straight for you, I would go and get that oboe or at least put it into your oboe fund. Enjoy it, have some fun with it, you deserve it.
Send it to the US Govt - they don’t have any and your money is worth double ours!
@All the people with good suggestions:
I think I’m going to put £250 towards an oboe, and spend £50 frivolously either on clothes or maybe oboe related paraphernalia. But the money doesn’t come for a couple of weeks so there’s still time to change my mind.
@David:
No.
You could donate some to charity or loan it on Kiva.
The decision you made was exactly what I was thinking. Put the majority towards the oboe and some towards music, cleaning cloths, music, etc. I haven’t played my flute in years but there were lots of little things that sucked up money.
Put some of it in your travel fund for your future trip to Mongolia.
I also like the donation idea.
No doubt you’ve already spent this money, but I wanted to offer two bits of advice that I try to keep in mind whenever I have new ‘found money’.
1. There’s a saying in Japanese that that translates to something like, “After a victory, tighten the strap of your helmet.”
2. I think that the hardest thing about personal finance is staying the course when things are going well, or poorly.