What Should You Do With Your Christmas Bonus?

Posted by Fitz Villafuerte under Personal Finance on December 6, 2011

The first half of December is upon us and for almost everyone working in the corporate world, it means that their 13th month pay and Christmas bonuses have already arrived.

For a lucky few, there would also be the 14th month pay and beyond – along with other year-end bonuses.

With this much money, I’m sure you’re already daydreaming of the many things you can buy.

But I’m sure you’re now also hearing a little voice inside your head telling you that you should save that money or invest it in something to make it grow.

I know because I heard that little voice too when I was still working as an employee.

So let me tell you now… before you spend that money on anything this Christmas, that you should listen to that little voice because indeed – the best thing you can do with your Christmas bonus is to save it.

“That’s it?! Save that money? Isn’t it better to invest it?”

Technically yes, it would be better to invest it – but ONLY IF you already have six months worth of emergency funds.

Do you have six months worth of emergency funds?

If your answer is “No”, then saving that money is your best option.



“What about paying my debts?”

That’s also a good option, but I won’t recommend using everything to pay your debts. I’m a big believer in saving money and paying debts AT THE SAME TIME.

If you want to understand why, read this: Should You Save Money If You Have Debts?

“I have an emergency fund, and I have no debts, so I should invest, right?”

Yes, you should invest the money, but you should INVEST IT IN KNOWLEDGE.

Seriously, if you have six months worth of emergency funds and you have no debts, but you don’t know where to invest that money, then your best option is learn about investing.

Buy and read books about investing, attend seminars, visit finance and business websites – feed your mind and have a better understanding of how investments work.

Do this and I’m sure, the next time you see an article with the title, “What Should You Do With Your Christmas Bonus?” – you’ll just smile and not bother to read it because you actually already know the answer.

When that happens, then you’re already one step closer to becoming rich.

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Photo courtesy of Eliane


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10 Responses to “What Should You Do With Your Christmas Bonus?”

  1. arbee says:

    nice post- as always. sir, can i seek advice from you about freelance writing? I have always wanted to do full-time in freelance writing and be homebased. The original plan was to be full-time early next year, but because of some unexpected events, I now find myself free to be a full-time freelancer. Obviously, I am now at a lost. Can you give me some advice, Please?

  2. arbee says:

    I really need your help, sir.

  3. Unfortunately, mine was spent with moving to a new place. It would’ve been my other option though to save it. Oh well! This blog of yours is a great find. Will check on it more often now, especially since I am planning to start a business.

  4. JoMi says:

    Hello, Fitz! Thanks for this wonderful post. I spent my 13th month pay in paying all of my debts. I want to start the new year right. I guess, my next goal is to have a 6 months worth of emergency fund… =)

  5. Aicha says:

    My christmas bonus:
    60% saved for a new account which I called my “Cushion Fund” and,
    20% goes to christmas gifts for my loved ones
    and finally 20% I gave to my mom and dad and some money to buy a wheelchair for mom.

  6. Andrew says:

    Nice read. Agree that trimming your debt to a healthy level and saving more are where it is at. If you have succeeded in these areas, investing a bit for the long term on big market pullbacks works. Happy holidays and new year.

  7. Maricel says:

    I agree with everything you have said. And what I really liked was the phrase: “INVEST IT IN KNOWLEDGE.” Investing can be tricky if a person doesn’t know what he’s doing. And yes, it’s always important to have that emergency fund readily available just in case.

  8. desertman says:

    I suddenly missed receiving Christmas bonuses! When I was still working in the Phils, my entire Christmas bonus goes straight to my mom’s pocket. If only I knew how to use my money that time, maybe, I wouldn’t be working abroad right now. hehe. But i’m glad that it’s still not yet too late for me as I continue my quest for financial freedom. Nice post Fitz.

  9. Good advice, I put about 10% of my bonus in savings and the rest is going to pay off my smallest debt. I’m so close to paying it off by the end of the year, so I’m pretty excited!

  10. Bill Harris Asignar says:

    Nice post…Merry Christmas and Happy New Year.

    If you want to invest financial education as well, I could refer you to a seminar. Its totally free, it may sound totally cheap because of the free stuff but its worthwhile. It’s all about Personal Financial Management and its applications.

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