Yes, it can be tempting to splurge your hard-earned bonus on something extravagant for you and your loved ones. Let’s not forget that it is equally important to think ahead and portion out some of this money to prioritise the necessary things. Here’s our take on how you can be savvy with your paycheck:
1. Pay off any existing debt
Debts incur high-interest charges along the tenures, which make them difficult to pay off within the short term. In addition, there are also hefty late charges if you fail to pay up on time. Hence, if you have personal loans or credit card debts, it will be best to use your bonus to pay off as much as you can, so you do not end up paying more interest instead of reducing your original loan amount. If your loans are too much to handle, be sure to seek external help or check back with the banks if they have better alternatives to bring down your high interest.
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2. Put your money in the right place to stretch your dollar
Put your monies into your bank account to continue growing your pot of wealth. Be sure to do ample research to make sure that you invest in the right product that allows you to make the most of what you have. If taking risks is not up your alley, not to worry as many banks in Singapore also provide attractive interest rates for your bank account. Typically, these high-return interest accounts come with other simple criteria (e.g. monthly credit of salary, setting up of GIRO payments or meeting a minimum monthly spend).
Maximise your spending by also using pay-and-reward digital wallets that provide additional perks like cashback or reward points if you spend on selected partner merchants. This can apply particularly to your regular purchases like groceries or petrol.
3. Invest in your future goals
Do you have dreams to start your own business in the future or embark on something new? Then this might be a good chance to start planning how you can get closer to your goals by growing your business capital or saving up for these future pursuits. If there are new skills or challenges that you have been wanting to attempt, it might not be a bad idea to give that a shot, as long as you have adequate savings to fall back on during rainy days.
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4. Relax and enjoy
If you have accomplished the above steps and you feel that you are financially stable, relax and enjoy the fruits of your labour by going on a fun-filled vacation to take a short break from your hectic work schedule. Otherwise, a simple treat for your friends and families will be a good way to express your appreciation to them as well.
With all said, we are designers of our own journey; how we decide to walk our path is solely dependent on ourselves. While it can be exciting to receive your bonus and tempting to spend it as soon as you receive it, it will be wiser to spend it on something meaningful which will benefit you in the long term.
Lastly, be sure to follow Credit Bureau Singapore on Facebook for more useful content and tips on how to maintain a good credit reputation. To check your credit score, you can purchase a copy of your credit report at https://www.creditbureau.com.sg/.
This article is contributed by Credit Bureau Singapore.