Sunday, March 29, 2009

What to do with a surprise bonus

When unexpected money comes into my life, it is easy enough to think "this is outside my usual money so I can treat myself and spend it whatever I want without guilt". I received a bonus in my latest check as a reward for pitching in on a departmental project as well as for an individual project. This was the largest single bonus I have ever received and upon learning of said bonus two days before payday, I became anxious. Despite all my preparations, my saving priorities and all my fiscal awareness, I thought "now what do I do with this?"

Saving for a newer car is my most immediate savings goal therefore, it should take the majority of my bonus money. However, I found myself baulking at putting the entire amount of my bonus into a single savings account. I can do this for smaller amounts of $30 here, $25 there, but add a zero or two and gut told me no.

So what are my alternatives? There were a few things tugging me in different directions. I have been thinking about my charity savings account and how much I would like to give this year. I would like to match the amount I gave in 2008 and challenge myself to give more. By taking part of this bonus check and funding the charity account, I would still have money leftover from my bonus to fund other accounts.

I have been contemplating the acquisition of a new MacBook Pro. My iBook is still working well but I am considering a replacement in the next year or so. Of course I would like a bigger screen, faster processor, more RAM and hard drive space. However, I am being strict with myself and saving for this purchase. Right now, I have $300 saved for a new computer. Saving all or most of my bonus for this purpose would bring me to nearly 50% of the price of refurbished MacBook Pro in my savings account. While not an immediate gratification of my Apple hardware desire, I would be months closer to buying a new laptop. This is an option I could pair with my charity account funding.

Despite some clear cut priorities for saving, I had to seriously consider what to do with the unexpected money. I thought about paying my mortgage down a bit or buying a nice piece of jewelery, but I prefer keeping my assets liquid. After thinking about it and writing down multiple options for dividing the money, I settled on my final strategy:

  • 18% was earmarked for charity; some of the money was used immediately for a donation

  • 25% was added to my car savings account

  • 25% was saved in my found money account (likely for my future MacBook Pro purchase)

  • 25% was transferred to my farm savings account

  • 7% I could spend how I like

I was able to save for all the items that matter to me, make a donation to my favorite local charity to celebrate my unexpected windfall and spend some on myself for pure indulgences of the food kind. I am pleased with the outcome and am grateful I have money I can both save and spend.

What do you think of my final action plan?


  1. Great strategy. I'm glad you took a small percentage for yourself, have fun with it! I'm happy to see that you put a big chunk into your farm account too.

  2. @Rain,

    I am sure my farm account is happy about it too! Still, choosing how to spend the money for myself is an exercise in what I really like. And if I do not choose wisely, I pay the price. I could have done better than I did. Ah, well, easy come, easy go.