Joan Lanzagorta
One of the reflections we have made about the Christmas bonus is that unfortunately many people spend it before receiving it. In other words, it comes out faster than it arrived and does not have the effect of additional income that can be used in a number of ways. We use this in the first part to talk about how to control our cash flow. Every time we receive an income we have to ask ourselves what do I want this money to do for me, before I get paid again? As simple as that.
Obviously, if we have already spent our Christmas bonus, there is not much we can do: we have to use it to pay that expense (or that debt). Not to mention, he is not father. It takes away our freedom and the potential to do something even more important with that extra money.
On the other hand, if we have not spent it, then it opens up many possibilities for us to achieve things that are important to us. It can help us increase our wealth, or get up to speed toward achieving one of our priorities.
There are many things we can do with our Christmas bonus. For example, for a few years I decided to use it to make additional advance contributions to my mortgage loan. Thanks to that, I finished paying my house in just over five years and I was completely debt free, in addition to saving a lot in interest. There are no words to describe how good it feels not to have that burden on you. Now I have much more freedom to allocate my income and accomplish other things that are important to me.
After I finished paying for my house, I have used my Christmas bonus for a number of different things. For example, I worked in a company that had an employee stock purchase plan, with a substantial discount from the market price and also with protection if the price fell more than a certain level. An asymmetric position: limited risk of loss, good profit potential. Although that purchase occurred in the month of March, I kept my Christmas bonus to take advantage of this great opportunity to increase my assets.
In other cases, I have used it to make additional contributions to my personal retirement plan, with the advantage of also obtaining an important tax benefit in my annual return. It is thus an advantageous use, win-win, that helps me in the patrimonial construction.
But not everything in life is saving or investing. One of the things that I like to do the most in life is to travel and get to know other places, other cultures and way of seeing life. It’s a great way to use the bonus – while I may not be able to pay for the entire trip, at least it will allow me to achieve my goal much faster.
For people who are not currently in a strong financial position, the Christmas bonus can be used to start turning around that situation. Pay off short-term debts, for example, like credit cards. Those who have finished with them can think about adding it to their emergency fund and have a “cushion” that allows them to handle unforeseen events without having to go into debt again. Focusing like this on building, on starting to live ahead and not behind.
In short, there are many possibilities to use our Christmas bonus wisely. It all depends, of course, on our life goals, our priorities and, of course, our current financial situation. Remember that any additional income can mean a great opportunity to make a positive change in our lives.
(Second and last part)
Coach in Personal Finance
Heritage
Senior executive in insurance and reinsurance with strategic business vision, high leadership, negotiation and management skills.
He is also a Personal Finance columnist at El Economista, Coach in Personal Finance and creator of the page planeatusfinanzas.com
Reference-www.eleconomista.com.mx