The Annual Bonus and Life Lessons!

April. A month that’s associated with most things new. Like many, in the early part of my career the significance of April was all about the bonus and the new things I could get with it. As I moved along and got teams to manage and lead, this month is now more associated with newer beginnings of my team members and colleagues. With each phase of my career, my narrative around the bonus changed a bit; and today, I feel comfortable to share some thoughts on how to work with this ‘windfall’ aka, the bonus.

Like most youngsters, my life goals, then, were about buying the latest gadget or spending the bonus on my folks. They were really short-term and short-lived joys, but big on memories for sure. Looking back, I do hope I could have gotten some directional views, early on, about a more systematic way of spending this extra money better. Over time, I learnt a few lessons by observing others that did this job well and also from my own mistakes. So here I’m attempting to share a few life lessons around the bonus. It’s April, and it will go away soon. What you do in this month, perhaps, will stay for longer.

1.     No matter what your bonus amount is, always keep your life goals in mind

?I knew folks who always earmarked their bonus for travel. Throughout their career, I remember, they invested this additional money towards traveling. It could be a dream destination or a short-trip to the wilderness or just a road-trip with family and their dogs. Bonus was for travel.

Life goals really help you focus on your priorities. They enable you to make plans and investments. So have short, medium and long-term goals in life, and after carefully analysing your bonus amount vis-à-vis your goals, make investments towards them accordingly. Buy your dream gadget that you’ve been eyeing through the year, but I’d suggest don’t spend all your bonus on it.

 2.     Try and clear some or all of your debts

Most of us live with some kind of debt. Ranging from a few thousands you may have borrowed from friends or family, to having loans for the house, car or for personal expenditure. Maybe there is a credit card bill to be paid. Paying off some of these in parts or whole, should surely be in your plan to spend the bonus.

As you make a list of your life goals, prioritise them as well. And paying off your debts should be right on top. Debts draw interest, and sometime may jeopardise relationships too. So, when you have some additional income, try and pay out the money you owe. Even if it is a small portion of the debt, attempt to clear it with the bonus.

3.     Add to your rainy day fund

This comes from the heart, and from the years spent in the financial industry. I continue to meet families who have either sailed well through tough times or have hit the wall really hard due to poor financial planning. I share this with everyone, and write here as well, that no matter how your investments are going, always keep some money earmarked for a rainy day, which will enable you tread through the tough times.

This investment is towards an uncertainty, and uncertainties don’t come with a time stamp or a warning. In case you haven’t started a "rainy day fund" yet, perhaps you can do so now. The bonus you get can be the perfect opportunity.

4.     For the larger good and for yourself

Till about half a decade or so, my time was dedicated either towards my work or family. However, it changed after a trip to Ramakrishna Mission, an organisation my wife is very closely associated with. On her persistence, I made a personal visit and met some of the most humble and intelligent individuals there, and saw how they go about enhancing lives. After that visit, I got a more personal perspective on the meaning of greater good and selflessness. It made me realise that my smallest contributions, always had a massive impact in the life of the receiver. The selfless act of making a difference in another person’s life is priceless.

So make this bonus a little bit about others as well. You can start by donating towards a cause or a charity of your choice. Something little from you, not only will go a long way for someone, but it will also bring in a feeling of contentment. So even if it is a very small part of your bonus, start with it. And as you grow in your career, let these contributions grow.

The bonus you receive is for all the hard work you have been putting in. While it can be confusing to think of all the ways you could spend it, a little planning will go a long way. Life Goals get DONE when memories are made. Let this April be about that as well.