5 smart ways to use your holiday bonus

From the creator

For some, the holiday season may come with a bonus. Bankrate analyst James Royal joins Wealth! Host Brad Smith to talk about five ways to use your holiday bonus to invest in a secure financial future. Royal recommends using your holiday bonus to boost your retirement savings by topping off your Roth IRA for 2024 or getting started for 2025. The analyst highlights the power of using a bonus to pay off credit card debt or other bills since it's "guaranteed" and "risk-free." He also recommends building up your emergency savings with your bonus since "it's a great time for a high-yield savings account," which could help create a buffer if inflation concerns reemerge. Another option is to invest in the stock market, though Royal note,s "You might feel tempted to sort of load that bonus into the market all at once, given what we've seen and even good projections for the year ahead, but take a step back [and] use dollar cost averaging [to] continue that investing discipline in an index fund like the S&P 500 (^GSPC) and invest that over six months or a year so that you're not market timing and putting it all in the market at one point." Finally, Royal says, "Take some portion of it and go buy something special ... Really consider what's going to bring you joy, what's going to be an investment, and something you can spend time with over a longer period of time." He notes receiving a holiday bonus is "an ideal time to get ahead on that savings. Why? You have that money, and you don't h

Published 2024-12-08 · Watch on YouTube ↗
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