How to best allocate my unexpected bonus?
September 6, 2011 1:29 PM Subscribe
Unexpected bonus of $1,000. How to handle - savings, 401k, something else?
posted by anonymous to Work & Money (16 answers total) 2 users marked this as a favorite
(You are not my financial planner and other various disclaimers.)
I'm in my late 20s and I work for a small nonprofit. I'm about to receive an unexpected bonus of around $1,000 after taxes. How to best put this to use?
This came as a nice surprise, as our bonuses are usually about 1/3 of that amount, and happen during a different part of the year. My instincts are either to put this right in my savings account, or to put most/all of it into my 401k, minus $100 for something immediate and fun, but I need some guidance as to what is most prudent.
-My annual income is $42,500 pre-tax.
-I have no credit card debt.
-I've got around $12,000 in my 401k, and I deposit ~$2750 annually. My employer makes an additional contribution equivalent to 3% of my annual compensation.
-I'm generally thrifty, but at my current income level, it's hard to sock away more than $25-50 a month to my savings.
-I have a bit under $5,000 in savings, w/interest rate of 0.08%. I treat it as an emergency fund and always "repay" if I "borrow" from it for expensive items (e.g. airfare). I've been meaning to at least transfer savings to a slightly higher yield account, but I am lazy.
-I live with my significant other in an expensive urban area. No car. SO and I keep finances separate, and SO has notable credit card debt. No kids (or plans for), no illusion of owning a house anytime in the foreseeable future. There is a nonzero chance I will be a trailing "spouse" when SO changes jobs in fall of 2012.
-I have student loans of ~$22,000, with monthly payments of around $300, which is manageable.
Any thoughts? I'm quite lucky to have this come my way, and I'd love some guidance. Savings? 401k? Blow it all on shoes (j/k)?
Throwaway email: BonusQuestionMefiThrowaway@gmail.com