Make your Christmas bonus count Loop Jamaica

The content originally appeared on: Jamaica News Loop News

It’s that time of year when many employees may be looking forward to holiday bonus packages at work. However, financial advisors strongly recommend that instead of blowing the extra cash on holiday festivities, employees should consider other effective ways of using the additional funds to extend the benefits into the new year and beyond.

Nina Peters, business relationship and sales manager at JN Financial Services, Catherine Hall, said people can be proactive with their bonuses by using them to boost their savings.

She recommends using a bonus to add to ‘rainy day’ funds, for example, or to pay down debts.

“When you borrow from yourself, often is the hardest loan to repay because it was too easy, so you owe it to yourself to pay it back now,” she said.

“You can also use your holiday bonus to chip away your credit card debts or even clear smaller debts. You can do this and start the New Year off on a good note,” she added.

Peters

Peters said that people who plan to use their bonuses to treat themselves this season, should also consider applying a generous 50/50 savings rule and allocate half into a savings account.

“Keep it very real. If you have to use that Christmas bonus to buy a gift for yourself or even help out with your regular activities, still put something down and still have something in miscellaneous so you won’t feel like you’re cheating yourself. Remember if it’s not saved it will be spent,” she encouraged workers.

Gayon Knight, assistant vice president of sales and client services at JN Fund Managers, said persons should also consider options to secure their future. This includes using the extra funds to kick-start or grow their investment portfolios.

“At JN Fund Managers, you can use the lump sum to invest in a mutual fund or you can start an automatic investment programme with a minimum of $5,000 monthly that is paid by way of a standing order or salary deduction,” she said.

Knight explained that mutual funds are less risky than investing directly in stocks and bonds and provide the opportunity for people to build their portfolios based on their risk preferences, timelines and goals.

She added that, although riskier, individuals seeking to invest their bonus for the long term can consider the stock market, which is another great way to put one’s money to work and achieve long-term financial growth.

“Investing in stocks is a good way to grow your wealth over the long term, but you must be willing to handle the risks. Buying and selling stocks is quite easy – all you need to do is choose a stockbroker, open an account and seek guidance from a financial advisor. You also have the option of buying and selling stocks online. When you invest and own stocks in a company, you will be entitled to a share of that company’s profits, which they pay out at different intervals as dividends,” she explained.

Knight said for the holiday period, people can also consider using their bonus to purchase gift certificates for investment products that will last.

She added: “A holiday bonus can be your employer’s way of showing that you are valued or a reward for your performance over the year. If you’re fortunate to get one, be sure to use it in a meaningful way that puts you on a path to improve your financial position.”