Accelerate Your Legacy
Accelerate Your Legacy
56. Navigating the Bonus Money Dilemma
In this episode, host Laura Sexton delves into managing unexpected bonus money and the importance of intentional financial planning. She discusses her own personal struggle with this recently, and the experience she and her husband had when receiving a bonus check, highlighting the challenges they faced in deciding how to use it wisely.
In this episode we’ll learn:
. the pain of spending without a plan
. 3 strategies for wise spending of bonus money
. Mindset Shift: Deserving vs. Intention
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Hello and welcome to the Accelerate Your Legacy podcast. I'm Laura Sexton, your trusted financial coach and money mindset specialist. Join me as we explore the world of money and money mindset while also paving the way for a lasting legacy that extends far beyond money. Together we'll eliminate stress, amplify freedom, and ensure you stop paying for your past so you can start saving for your future. If you're seeking peace in your finances, more margin in your budget, and a legacy that inspires generations to come, you're in the right place. Hey accelerators, I hope you're having a great Thursday. I wanted to talk to you today about something that I sometimes struggle with. I know I have a podcast and so I'm supposed to be a quote unquote expert. I'm supposed to be the person that's standing up here in front of you telling you all of the things because I've gone through all of the struggle too. And I want to tell you about One area of finances that I sometimes have a hard time with. So my husband and I were talking in the car and he has this too, which when you have two people in a relationship that share money and they both have the same problem, it's something you need to work on. So this is something that we are currently working on. I think probably some of you will have this same issue. Let me know if I'm talking to myself here, or if this is helpful to any of you. We received a bonus check. At the end of the year, and instead of immediately putting that towards the future. We spent it at least in our minds. So, the 1st thing that we did was we saw this big number come in. We were really excited. We're like, what are we going to do with it? Well, here are all of the things that we've been thinking about. 1 of the things was a new couch. We really wanted to get a new couch for ourselves. We're like, what are we going to do? So we can get a couch and then we can get this and we can get that. We can get this other thing. And so we started. Listing out all of the things that we can do with the money. We spent it all in our minds before it even hit our bank account, which let me tell you is a really smart to do when you are budgeting. You want to spend all of your money on paper on purpose before the month begins. But you see, with this bonus check, it wasn't already earmarked for something. It hadn't already been decided on when we get a bonus. We'll spend it on this because we weren't expecting. To get a bonus. We weren't planning on having this money. It was a true bonus. It was a surprise. And we started treating it like fun money. When I was talking to my husband about how he feels about this, we were really digging into it, right. And doing some coaching, he said, well, I deserve to spend it. That's his line of thinking. The circumstance is I work really hard. The thought is I deserve to spend it. And our actions follow that thought, so we spend it because he worked really hard and he quote unquote deserves it. Well, let's be honest. If we're sitting back and thinking we're being rational, we know that it feels good to spend the money. And if you've worked really hard, it can feel like I just need a nice reward because I worked really hard and I agree. You should get a nice reward for working hard. That is the whole point. We don't work hard just for the sake of working hard. We work hard for the purpose of the work. So instead of being in this, I deserve to spend it mindset, we have to really think about the best way to do it. So you deserve it. Great. Let's only indulge in it a little instead of spending the entire amount of money. What if we do something small start small move on. Because if we waste it, we've worked for nothing. This was a really hard realization to come to if we have all this money and it comes in and we waste it and we don't even know what we spend it on. Why did we work so hard? There is a justification that we tell ourselves. The justification of, well, I worked really hard, so I should get to spend it. That justification does have a consequence. And the consequence is, at the end of the day, if all I do is waste the money and I blow it without putting any kind of intention behind it, I worked for nothing. And that sucks. One of the things that we had to really look into, one of the reasons why we felt like spending and immediately was because it wasn't already earmarked for anything. We know what our next steps are in our financial future, so we could have just used it on the next step, which for us right now is buying a house. I could have all gone directly into savings and we probably should have put it all into savings with the caveat of allowing ourselves. A percentage for enjoyment. Now we are aware of the situation and my business is picking up there's more income coming in, which I'm super thankful for our whole family is thankful for, but we have to be very careful that that's not just extra bonus money that we can blow on whatever we want. We have to allow ourselves a percentage for enjoyment, but also make sure that the rest goes towards the next goal that we have in mind. Now, that's not to say if we need a new couch. We can't put that on a list of things that need to be purchased in the not too distant future. Just so you guys know, instead of buying a new couch, we just bought a new couch cover, which cost about 400 dollars. So it could have just been a new couch. It was pretty expensive, but we love our couch and so we're just going to recover it. That's going to be cool. When the money coming in is a persistent issue, when we know that there are bonuses coming in, we have to just decide to make a plan for that money. So that's what we're going to do. We're going to sit down and think about what are the things we want to buy. We do have a running list of things that we would like to purchase. Granted, this last time that we had some bonus money come in, we bought more than just the top thing on that list. We bought a few of them, but we know that we aren't going to do that in the future. So, if it is a consistent problem, you need to plan ahead. Here's another issue that we had with this big check bonus situation. There's a lot of should involved. What should you do with it? I don't like the word should. I don't think that it is helpful. What should you do? I always adds, I think. Some shame or the potential of shame and guilt, so I don't like the word should, but in this discussion, please go with me and we will just use the word. What should you do with it? Well, 1st of all, you should discuss it ahead of time. The 2nd, oh, look, I went off script and apparently I was on script. So the 2nd thing is, you should keep a running list of the things that you need. And the 3rd thing is, you should make sure that some of it is forward focus. So anytime that you get a bonus, you want to make sure that that money is helping you move forward. Now, that doesn't mean that all of it has to go into retirement savings that you're not going to be able to touch until you're 59 That doesn't have to be what it is, but it could be that you put some of that money into a high yield saving for a future purchase, or it could be that some of that money goes towards a vacation fund that you were saving for. It could be that some of that money goes towards whatever it is in the future. Some of the money can be spent in the now, and I would suggest that that percentage be much smaller than the forward focused money be. So, let the bonus give you a little bit of enjoyment now, but a lot of enjoyment in the future, especially if it's an account that is going to gain interest. Now, all of this being said, if you are in debt, if you are in debt, and you are currently paying off all of your debts. I suggest using the snowball method, paying off smallest to largest, and then I also suggest that any bonus money. You put 98 percent of it towards paying off your debt. You put 98 percent of it towards paying off your debt. I say 98 percent because I want you to have a small bit of enjoyment. And I think that you should have some of these enjoyment factored in. Right there should be places where you say, these are the things that I enjoy. These are the things I want to do and have a little celebration. Plan it ahead of time. I don't want your little celebration to turn into buying brunch and cocktails for 47 people. Small celebration. What can you do to celebrate hitting your next milestone or getting this big bonus that you weren't expecting? Don't blow your money. Don't waste it. Don't wonder where it went. You are in charge. Be what happens to your money. That's it for this week, friends. Go out and make a difference. Thank you for investing your time with us today on the Accelerate Your Legacy podcast. Remember, your legacy isn't just measured in dollars and cents, but in the tools, habits, mindset, and reputation you leave behind. Don't just listen to the show, but take action on what you've learned. Share this wisdom with a friend who can benefit and help us spread the word by rating and reviewing the podcast. For questions or encouragement, reach out to me on Instagram at Accelerate Your Legacy or explore the resources listed in the show notes. I will be back with you next week. Until then, build your legacy with intention.