Wah, boss got give year-end bonus ah? Swee lah!
Some of you might call the year-end bonus a second Christmas. Others might cry in relief because now they can finally afford the iPhone to end all iPhones – the iPhone that’s so pricey, they named it X, as in… expensive. (We know. You visit your telco’s phone plan pages every other day.) Or maybe you’re one of those BTO owner-hopefuls who dream of one day owning a Dyson.
That’s all well and good, but have you ever thought about making full use of your bonus’ potential for the coming year? It’s not as awful and joy-depriving as it sounds. For something that comes only once a year, why not think pragmatically for a moment and adopt a more forward-thinking approach?
There are many ways to fully make use of your well-earned bonus – you did work your butt off for it, after all!
THIS DEBT-FINITELY SHOULD BE ON THE TOP OF YOUR LIST!
One of the first few things you should do with that bit of extra cash should be to set aside an amount towards clearing your debts, whether good or bad. If you already have credit card bills to contend with, paying them off will go a long way in saving you from the avalanche we like to call interest. Credit card interests are no joke, and can set you back if you’re not careful.
Other things to pay off could include your education loan from university or poly as well as housing loans. Think about it this way: you work hard now to savour the freedom of a debt-free life later. It’s going to be so worth it!
LOOK FOR A LONG-TERM RELATIONSHIP WITH YOUR MONEY (THAT MEANS INVESTMENTS).
Money helps you to survive and ensure you have food on the table every month. But that’s not all money can do. It’s not a resource that’s static, it’s a resource that can work for you – just without the suit and tie.
Investing your money can work in your favour if you play your cards right. Get a hold of someone with the knowledge to help you put your money in the right places – most insurance agents cover investment knowledge as well as the typical hospital and injury coverage – and put your money to work! The jargon and technicalities will come to you at first like hieroglyphics, but once you get the hang of it, you could be looking at very fruitful returns in the long run.
If you’re ready to dive in, here’s a quick introduction to the world of investing.
INVESTMENTS, EPISODE TWO: RELIEVE YOURSELF, NOT TAX YOURSELF.
Stocks and bonds aren’t the only way to wisely use your year-end bonus. You should also consider directing some of your money to your CPF Special Account. Because the lucrative year-end bonus is also seen as a form of income, you’ll be able to save on your taxes as well as accumulating a hefty CPF balance. You’re working your way to a smooth and comfy retirement, which is exactly what the future you will thank you for. Tax relief is called relief for a reason!
WORKING ON YOUR GREATEST WORK IN PROGRESS: YOU.
Consider utilising that sweet, sweet money into classes or programmes that aim to equip you with new professional skills or refine existing skills. Shaping yourself into a more competent professional should be an ongoing affair, especially if you want to be ready for when that next opportunity comes knocking.
If you don’t have SkillsFuture credits yet, you could make use of your money and invest in yourself! As the year comes to an end, it’ll be awesome if you can start thinking forward in bigger leaps instead of just settling for a new gadget to fascinate yourself with for only a handful of months. The Singapore University of Social Sciences offers part-time degree programmes to full-time workers as well, which is something you can consider if your finances don’t allow for independent, full-time study. Love yourself and forge ahead!
GIVING THAT WARDROBE A MAKEOVER – WITH PURPOSE.
This is not a directive to let loose and indulge in that shopping spree you’ve been starving for all year. While it does involve choosing a new selection of clothes and accessories for your wardrobe, consider levelling up your range of professional office wear for the new working year! Being well-dressed can affect you on a psychological level as well as alter the impression you make on those around you. Wear the success you want to achieve in 2018!
RAINY DAY CHECKLIST: AN UMBRELLA. AND 6 MONTHS’ WORTH OF SAVINGS.
EH WAIT AH. Don’t deplete your bonus just yet! Sometimes the best thing to do with your money is to simply save it instead of giving in to the dark side and splurging on everything you see. As a full-fledged working professional, the onus is on you to effectively take care of yourself and be prepared for rainy weather, or an all-out storm.
An iPhone X won’t save you if you were to one day suffer an accident that requires serious medical attention (choy, touch wood). It’s good practice to keep at least six months’ worth of savings in the bank JUST IN CASE, so you won’t end up scrambling for cash when something happens. Better to be safe than sorry!
USING YOUR MONEY TO BE THE GIFT THAT KEEPS GIVING.
You might also want to share what you have with someone in need. Local charities like the National Kidney Foundation or the Cancer Society are always open to receiving donations from generous donors. Consider pitching in to help fund an animal shelter as well! Money may not be the most important thing in the world, but it can very well power organisations that seek to help the underprivileged and abandoned animals.
INCOMING ICEBERG! AKA PREDICTING MAJOR EXPENSES.
It’s important to always look ahead into the next year and try to figure out what big expenses are coming your way. It could be that dreaded annual dental check-up, replacing faulty furniture and appliances, or maybe you’re one of those people who are revving up for a BTO flat with your significant other. Whatever it is, it’s always good to think before you spend, and if saving up for something in 2018 can help you, then why shouldn’t you save up and wait?
On the other hand…
ALL WORK AND NO PLAY MAKES YOU A VERY REPRESSED AND TIRED INDIVIDUAL.
Of course, after an entire year of hard work, you deserve some top-quality rest and relaxation. However, before you start swiping that powerful little rectangle in your hands, think about setting a ‘fun budget’ before jumping in. It’s ideally good to set aside about 20% of your bonus for this, because you don’t want to wake up one day and find yourself staring forlornly into an empty bank account. It will stare back at you, and then it will swallow you whole.
Consider some affordable staycation options, for one, and watch that spending limit! Now go have fun!
HELP YOUR FUTURE SELF ACHIEVE THAT SAVINGS GOAL.
You’ll realise by now that this article talks a lot about saving. That’s because saving is the kindest, most thoughtful thing you’ll ever do for yourself – and with good reason. If you have a set savings goal to hit, set aside some money from your year-end bonus and feel good about it later when you finally meet your target. It’s always good to be pragmatic.
The cost of living in Singapore can be seriously demanding. For a young professional, you have a lot of years ahead of you to plan and predict what might come your way. Save your future self some grief and learn to spend your money wisely. All of it will be worth it in the long run, and you won’t have to subject yourself to a grass-only diet. Ever.