Deploy your year-end bonus (or upcoming tax refund) wisely
If you were blessed with a year-end bonus for exceptional performance on the job, or if you're due to have a meaningful tax refund this spring, consider deploying that money with a "diversification" mentality. That is, instead of allocating those dollars 100% to a vacation or a remodeling project at home, consider a broader scope for those dollars. Perhaps you commit 50% of the bonus toward "fun money" and 50% toward improving your long-term financial situation.
It's natural to feel some tension between spending vs. saving. With this compromise, the inner saver and the inner spender in you are both satisfied.
If you need some help brainstorming ideas to improve your long-term financial situation, here are a handful of ideas:
- Add money to a Roth IRA. You have until April 15, 2017, to make contributions for the 2016 tax year.
- Contribute toward your child's or grandchild's 529 college savings account.
- Boost your "Vehicle Savings Fund" balance.
- Pay down the principal on your mortgage.