What Nannies Should do with Their Holiday Bonus
The start of a new year is a great time to take control of your financial life.
During the holidays we discussed what parents should pay nannies for holiday bonuses and The Wall Street Journal quoted us on the topic as well. We also talked about how nannies can give holiday gifts on a budget.
If you followed our advice you did not rely on your holiday bonus to purchase gifts. If you worked hard and the parents rewarded your good work with a holiday bonus, don’t spend the extra income frivolously. Use the extra money to pay-off debt, build an emergency fund, make some investments, or even give to charity.
First, if you have outstanding credit card debt use the money to pay-off as much debt as possible. Determine which card has the highest interest rate. That is the debt you want to satisfy first. We will discuss how to do reduce debt in more detail next Tuesday.
Build an Emergency Fund:
Once you have paid-off your credit card debt then look for the best possible savings account. Financial planners have been warning Americans to build a three-to eight-months worth of emergency cash in case they get laid-off. If something unexpected and expensive were to happen, that's the cushion that will soften your blow. The savings is for emergencies (like if you are unemployed or sick) only. Visit this blog again on Wednesday when we will discuss building an emergency fund.
Make Retirement Investments:
If you have no outstanding debt and already have a savings account for an emergency fund then you should consider making some investments. An Individual Retirement Account (IRA) is a personal retirement savings plan available to anyone who receives taxable salary during the year. Visit us again on Thursday we will discuss retirement investments more thoroughly.
Give to Charity: If you're already debt-free, have fully funded your investment accounts, and have your emergency funds are in order, you've got it made. There are plenty of deserving, but under-funded, charitable causes that could use some support. Stop by next Friday to learn how to get tax write-offs when donating to charities.
To learn how to manage your money in more detail stop by again next week when we will discuss gaining control of your finances in more detail.
Did you get what you expected for your holiday bonus? What did you do with your holiday bonus?