Some lucky South Africans will soon receive their year-end bonuses. Whether it’s a 13th cheque or a smaller amount, it makes no difference. Having extra money at an expensive time of year is a great joy and, for some, a tremendous relief.

Bonuses used to be common and everybody got one at the end of the year, however that’s not true any more. Times are tough and companies have to tighten their belts and bonuses have become a performance-based luxury and not a guaranteed, so if you get one, treasure it.

Getting a bonus represents a great opportunity and it can make a very big difference to your future. Before you go shopping, consider the following dos and don’ts.

DO:

  • Pay off debt: if you have built up any debt during the year, your bonus is the best – and may be the only – opportunity you have to get rid of it. We know that using your bonus like this is not fun, but just think what a relief it will be to get that debt off your shoulders in one quick move.
  • Pay your bills: if you have any outstanding bills that you just haven’t’ been able to pay, we promise you they’re not going to go away by themselves. Again, your bonus is the best opportunity to catch up on them.
  • Pay into your bond: putting a lump sum into your bond will save you thousands of Rand down the line. You won’t see the result immediately but when you see it in future you will be thrilled! Check first though that you there won’t be any penalties involved.
  • Build an emergency fund: what happens if you lose your job tomorrow? How will you pay your bills at the end of the month? Generally you should always keep 3 months’ salary in the bank at any one time to cover yourself in case of emergencies. Your bonus is a great place to start building that fund.
  • Save or invest: even if you only put a percentage of your bonus into your savings or investment account, don’t forget that a little goes a long way.

DON’T:

  • Go on a spending spree and buy an unnecessary goods: yes we know you want that big screen TV or that dishwasher, and we know that shops are full of lovely gifts, but do you really think it’s a good idea to spend this precious money on non-essentials? We aren’t saying that you can’t indulge a bit, but rather do it once your debt is paid off, your bills are up to date, your bond is reduced and your future is financially secure.
  • Imagine your bonus is bigger than it is: getting a bonus might make you feel like you’re suddenly rich but you’re not. You just have a little extra money and if you don’t use it wisely it will be gone in a flash! And we all know that what is gone, is gone.

Don’t go bonus crazy. Go bonus intelligent and reap the rewards for a long time to come.