If you are lucky enough to receive an annual work bonus, you may be tempted to go on a splurge. But keep in mind that that money, no matter how big or small, is the result of 12 months' work. So you may want to balance the need for immediate retail satisfaction with your long-term goal of financial freedom. Perhaps use 10 per cent to reward yourself with something special now and look at ways to save or invest the other 90 per cent?
Here are some quick tips to ensure your bonus keeps earning a little bit more each year.
Ask your employer to salary sacrifice some, if not all, of your bonus. This tax-effective incentive will have you paying 15 per cent tax in the dollar rather than that of your marginal tax rate (up to 45 per cent). It’s a welcome saving that has the chance to compound over many years.
It's always a good idea to enhance your knowledge and skills. Online or part-time study could improve your job chance and help you stay ahead of the pack. Some employers subsidise courses if they relate to your role. Speak to your HR department about potential opportunities for you.
Seeking financial advice is as much about gaining peace of mind as it is about building wealth with your current and long-term objectives in mind. Getting good advice is invaluable, so invest time in seeing a financial adviser today.
While this one has no immediate tax benefits you could save yourself thousands in the long run by paying a little more off the mortgage today. If you prefer to keep the cash handy, an offset account will minimise interest on your loan while keeping it within access.