It’s been a tough year. The thought of happily putting your feet up (or partying it up, whatever you choose) over the festive season probably sounds so good right now. 

Factor in that end-of-year bonus or 13th cheque, and you could probably list all the reasons why you deserve to treat yourself to shopping trips, French Champagne, or dining out at fancy restaurants (all dressed in new clothes, of course). 

We know the temptation to spend is real, especially after you’ve worked so hard, but you’ll be better off in the long run if you use that extra money to pay off your debt or put it towards an investment. 

We’re not saying don’t spoil yourself, but don’t spend every cent on whims or gifts either. There’s a way to have your proverbial cake, eat some, and then do clever things with the rest of it to put you in a better financial position for 2020. 

Here's how to approach your bonus wisely:

Wait until you’re paid 

Don’t go spending foolishly, racking up credit card debt in the hope that your expected bonus will bail you out later. Firstly, it might not come (even if you’ve been assured it is), or it might not be the amount you hoped for. Remember, your bonus might also be taxed, so don’t rely on having every cent of it to spend. 

Move your bonus 

As soon as you receive your bonus, move it from your current account to another account. It’s better for it to be out of sight and out of mind until you know exactly what you will do with it. The less temptation there is to spend it, the better. 

Assess where you need it most 

Do you have a big credit card debt or personal loan that is gaining more and more interest? Do you have any investments that could help you make money in the long run? Do you want to build up your emergency fund of three to six months’ salary that you can set aside for life’s unexpected events? 

Another option is to put some of your bonus into your bond to save on interest.

If you’re considering buying property, put some money aside for a deposit. The bigger the deposit, the more you’re likely to save over the bond term as the bank will likely grant you a more favourable priced bond. 

You could also choose to pay your kid’s school fees upfront for the coming year. Some schools offer discounts if you pay early. You can then also scratch off school fees from your monthly budget. 

Take stock of your financial life and then decide what you need to do first. It could be paying off bad debts, or putting your money into something like a tax free investment to build up your worth for the future. 

African Bank has the best investment options for various budgets. These include:

  1. African Bank Tax Free InvestmentSouth Africans can invest up to R33 000 each year in a tax free savings account, without paying income tax, dividends tax or capital gains tax. You will need a minimum deposit of R100. 

  2. African Bank Access Accumulator: This 24-month investment vehicle is unique to the South African market, allowing you to access your money in a 24-hour period with no penalties or notice period. You can start investing with R500 per month. 

  3. African Bank Fixed Deposit: Earn South Africa’s best interest rate* with just R500. Your interest rate will not change for the duration of your investment. Choose whether or not you want your interest paid out monthly, every six months, every 12 months or at maturity. 

  4. African Bank Notice Deposit: Enjoy above-market returns, with access to your funds at short notice. You can open this account with just R500 and make deposits as small as R100 each month.

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