For those who receive bonuses at work, do you:
Save the bonus?
Spend the bonus?
Some combination of Save/Spend?
I have always saved 100% of any bonuses. It's easy, painless saving. Plus, my company, like most, goes on periodic downsizing binges. I never knew if/when the downsizing grim reaper was going to appear at my cubicle. If downsized and unable to find another job, I might have needed that bonus to buy food in some future year. If I managed to avoid the reaper, then saved bonuses just get me to FI faster.
For the first 15 or so years of my career, us little people did not get bonuses. They were only for the Execs. Then Execs decided we would all get bonuses, but raises would be lower. That way, the money they gave us would not get built into our wage base and compound. Thus, there would be more money for Exec bonuses in the future!!! Well, that's not what they told us, but we figured it out pretty quick.
Our first bonuses were around $200. Our reaction was "Geesh, don't bother wasting paper/ink to print the checks, just keep it". Bonuses went up rapidly in subsequent years. Considering the disparity between our $200 bonuses and the Execs multi-million dollar bonuses, I think the Execs were afraid we little people would hang them upside down in the corporate plaza and beat them like pinatas to see if we could get any coins to fall out.
When our bonuses became large enough to really notice, my boss (one of those "this dollar's burning a hole in my pocket" types) asked me what I was going to buy with my bonus. This was one of those "think on your feet moments", something I'm not good at. I told him I was going to save it. He seemed disappointed. To him, bonuses were meant to be spent.
I got to thinking that I should not use the "save it" answer again. When boss was dividing up the bonus money, he might say "well, if I give to Mr. Saver, it's just going to get saved. If I give it to Mr. Big Spender, it will go to a 100 inch TV or something similar".
The next year, when boss asked me the big question, I said it would go in the general fund, and get spent on some kid stuff. He was somewhat happier with this answer, since he also had kids and understood the "whooshing" sound as dollars fly out of your wallet for kid things. But, what I didn't tell him was that the general fund was also a holding area for money destined for savings, so, in the end, the bonus was saved.
In years after that, DS was getting older and college was looming. So I started saying, "Oh, huge college bills coming up, that bonus is destined for tuition payments". Boss was happy with this, as he was also battling college bills. But, what I didn't tell him was that I already had college all planned out and taken care of, so, in the end, the bonus was saved.
Nowadays, many of my same age peers have woken up and realized they need more than $10,000 in their saving account to fund retirement. They are discovering the joys of 401k catch up contributions, maxing out 401k's and IRA's, etc. So now, I can be myself and not hide my horrible character flaw. I can just say, "Oh, that bonus is going into retirement savings".
Save the bonus?
Spend the bonus?
Some combination of Save/Spend?
I have always saved 100% of any bonuses. It's easy, painless saving. Plus, my company, like most, goes on periodic downsizing binges. I never knew if/when the downsizing grim reaper was going to appear at my cubicle. If downsized and unable to find another job, I might have needed that bonus to buy food in some future year. If I managed to avoid the reaper, then saved bonuses just get me to FI faster.
For the first 15 or so years of my career, us little people did not get bonuses. They were only for the Execs. Then Execs decided we would all get bonuses, but raises would be lower. That way, the money they gave us would not get built into our wage base and compound. Thus, there would be more money for Exec bonuses in the future!!! Well, that's not what they told us, but we figured it out pretty quick.
Our first bonuses were around $200. Our reaction was "Geesh, don't bother wasting paper/ink to print the checks, just keep it". Bonuses went up rapidly in subsequent years. Considering the disparity between our $200 bonuses and the Execs multi-million dollar bonuses, I think the Execs were afraid we little people would hang them upside down in the corporate plaza and beat them like pinatas to see if we could get any coins to fall out.
When our bonuses became large enough to really notice, my boss (one of those "this dollar's burning a hole in my pocket" types) asked me what I was going to buy with my bonus. This was one of those "think on your feet moments", something I'm not good at. I told him I was going to save it. He seemed disappointed. To him, bonuses were meant to be spent.
I got to thinking that I should not use the "save it" answer again. When boss was dividing up the bonus money, he might say "well, if I give to Mr. Saver, it's just going to get saved. If I give it to Mr. Big Spender, it will go to a 100 inch TV or something similar".
The next year, when boss asked me the big question, I said it would go in the general fund, and get spent on some kid stuff. He was somewhat happier with this answer, since he also had kids and understood the "whooshing" sound as dollars fly out of your wallet for kid things. But, what I didn't tell him was that the general fund was also a holding area for money destined for savings, so, in the end, the bonus was saved.
In years after that, DS was getting older and college was looming. So I started saying, "Oh, huge college bills coming up, that bonus is destined for tuition payments". Boss was happy with this, as he was also battling college bills. But, what I didn't tell him was that I already had college all planned out and taken care of, so, in the end, the bonus was saved.
Nowadays, many of my same age peers have woken up and realized they need more than $10,000 in their saving account to fund retirement. They are discovering the joys of 401k catch up contributions, maxing out 401k's and IRA's, etc. So now, I can be myself and not hide my horrible character flaw. I can just say, "Oh, that bonus is going into retirement savings".
