Happy Caucasian and African-American women shopping during the holidays
Happy Caucasian and African-American women shopping during the holidays

5 ways to make your holiday bonus work for you

Whether you save or spend, make a plan and stick to it

The holidays are right around the corner and this could mean a holiday bonus. While a bonus is never a sure thing, many may receive a bonus from their employer. Whether you receive a $100 or $5,000 bonus, it is important to have a plan so you don’t slowly spend away your extra money with nothing to show for it. No matter what the amount of your bonus, here are a few tips on how to make the most of it.

What is your holiday bonus plan?

1. Build your emergency fund

An emergency fund is a key element of a healthy financial life. Receiving some additional money at the end of the year is a great chance to build or replenish your emergency fund. This will give you peace of mind and a buffer to help you handle any unexpected expenses. A good initial target for an emergency fund is to save $1,000 and grow it so you have enough saved for three to six months of living expenses, but everyone’s financial situation is different, so be sure to evaluate what the best amount is for you. 

…it is important to have a plan so you don’t slowly spend away your extra money with nothing to show for it

2. Pay down debt

If you have already established your emergency fund, using your holiday bonus to pay off debt is a great way to take advantage of the extra money. Many of us use credit cards during the holidays due to the extra expenses of gifts and food and you can use your bonus to pay off your balance and avoid paying significant amounts of interest. If you budgeted perfectly for the holidays, you could even use some or all of your bonus to pay off student loans, make an extra payment on your auto loan, or even get ahead on your mortgage. 

Young child wearing hat and sunglasses sitting on hammock at the beach
Young child wearing hat and sunglasses sitting on hammock at the beach

3. Save for a vacation or home improvement project

Ready for your dream vacation? Can’t stand your outdated kitchen? Your holiday bonus can help. Create a separate account and place some or all of your bonus in it so you can use the money when the time comes for remodeling or traveling.  You can continue to add money throughout the year to help you achieve your goal.

4. Invest in the market or yourself

It’s never too late to learn a new skill or to invest some extra money in a secure investment. Bonus money can be a great way to pay for personal development options that your employer doesn’t fund. You can also use some money to max out your retirement accounts for the year or to invest in an index fund on the stock market. 

5. Treat yourself

It’s important not to lose sight of the fact that you earned your bonus through your hard work throughout the year. You should use some portion of the money from your bonus to treat yourself and your family. This could be a nice dinner, a new luxury item you’ve been wanting, a spa day, or some other thing that brings you joy. 

Take advantage of your holiday bonus to get a great financial start in the new year. The most important thing to remember when planning for your bonus is to make a plan and stick to it. A plan will help prevent you from slowly draining your bonus on items that don’t further your financial and personal goals. 


The information on this page is accurate as of January 2021 and is subject to change. First Financial Bank is not affiliated with any third-parties or third-party websites mentioned above. Any reference to any person, organization, activity, product, and/or service does not constitute or imply an endorsement. By clicking on a third-party link, you acknowledge you are leaving bankatfirst.com. First Financial Bank is not responsible for the content or security of any linked web page. Member FDIC / Equal Housing Lender.

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First Financial Bank is not affiliated with any third-party websites. Any reference to any person, organization, activity, product, and/or services does not constitute or imply an endorsement. First Financial Bank is not responsible for the content or security of any linked web page.