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How do you handle your bonuses?

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  • How do you handle your bonuses?

    My wife and I both get fairly large quarterly bonuses (will nearly double our base salaries this year).

    As part of our financial plan we decided that 100% of that money will go towards our WAR. It is currently going towards our mortgage, which will be paid off in under 2 years. After that, it will be all towards our taxable account.

    Sometimes it's tempting to want to divert that money towards more "fun* things. However, with our current plan anything left from our normal take home pay (minus 403, 457, 529, mortgage plus extra 3k towards principle) can be spent as we please without needing to budget.

    I hate budgeting. The whole" pay yourself first" concept makes it easy to avoid that.

  • #2
    Are you saving enough for retirement? My guess is that you are so I would absolutely try to divert some of that money to something fun, even if you have to force yourself to.

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    • #3
      Most of my income comes from bonuses. We have a set budget based on my "draw" salary, so when we get a bonus it in theory shouldnt have an impact on our day to day expenses. Thus, we generally have a 90/10 rule, 90% towards WAR and 10% to spend on whatever. Usually thats split between saving for a vacation, home furnishings, concerts/events, etc

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      • #4
        Are you saving enough for retirement? My guess is that you are so I would absolutely try to divert some of that money to something fun, even if you have to force yourself to.
        With our current plan we have roughly 35% gross going towards our WAR. After all the money is allocated, including our average monthly credit card bills, we still have about $9-10k left over. If anything, I am wanting to increase our savings rate. However, right now it is a nice feeling to be able to book that long weekend or buy that extra nice bottle of wine without a second thought knowing that we're meeting out goals.

        We are both early in our careers. I often have to remind myself that we are doing the right things. Even with the amount we are saving retirement still seems so far away.

        ​​​​​

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        • #5
          Originally posted by GEAUXT View Post

          With our current plan we have roughly 35% gross going towards our WAR. After all the money is allocated, including our average monthly credit card bills, we still have about $9-10k left over. If anything, I am wanting to increase our savings rate. However, right now it is a nice feeling to be able to book that long weekend or buy that extra nice bottle of wine without a second thought knowing that we're meeting out goals.

          We are both early in our careers. I often have to remind myself that we are doing the right things. Even with the amount we are saving retirement still seems so far away.

          ​​​​​
          $9-10k extra per month in the brokerage account should bring it closer...

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