Many workers in the US and beyond enjoy a monthly, quarterly or yearly bonus on top of their contracted earnings. This figures as a nice little pot of cash that individuals can spend as they wish, without worrying about destabilizing their lifestyle budget. The question, of course, is how exactly to spend this sum of money. While the temptation may be to buy that commodity that you’ve been salivating over for months, there are always wiser ways to use a lump-sum of cash to improve your life – and this article looks at the most savvy three.
Invest
When you read the word invest, it would be wrong to immediately think of the stock markets. While that’s one way in which you can store a lump sum of money to see it bear fruit further down the line, there are other ways in which you can invest your cash to see returns down the line. Consider the following list, all of which figure as smart investments for lump sums:
- Home improvements to increase the value of your property
- A second-hand car that’s likely to appreciate in value with some dust-ups
- The future of your children – by making a nest egg or college fund
- Work equipment or tools to enhance your productivity and profitability
- A new qualification or skill that’ll make you more employable in the future
All of the above figure as savvy investments while also improving your present living conditions – so why not use your cash in this fashion?
Protect
Another smart use of your lump sum of cash is to use it to protect against future economic hardship. Even if you feel you’re in the most stable of jobs, it only takes an anomalous event to knock you into redundancy and unemployment.
There are numerous ways in which individuals can take action to prevent economic hardship in the future. You could spend your money on one-off single premium life insurance to protect your family against your untimely death, or make a trust fund or other savings cache to leave your cash in for when hard times strike. Whatever you choose to do, protecting yourself from a potentially difficult future will be dividends should you require additional cash in the future.
One-Offs
While the above two tips are sensible and smart, this last tip is the exciting one. Money isn’t always there to be hoarded and invested – sometimes, if there’s something worthwhile that you really need the cash to do, it’s worth splashing out and going for it.
The list of such activities is surely endless. You may want to see gorillas in the wild, skydive over a nearby field, purchase a graphics tablet to help you create digital art, or pay to see a highly-regarded Broadway show with your family and friends. As long as it’s worthwhile and special, spending money on making unique memories is as smart as investing it, or using it to protect against future hardship.
Next time you receive a cash bonus from work, bear the three above tips in mind to make that money go as far as possible for you and your family.
Image credits to: Nick Youngson CC BY-SA 3.0 Alpha Stock Images
