facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
What should I do with my bonus? Thumbnail

What should I do with my bonus?

Attorneys

Written by Chris DeVito

We’re coming up on every associate’s favorite time of the year, BONUS season! The current AM 100 scales tops out at around $115,000, now that’s some serious chedda cheese! Some will get paid before the end of the calendar year while others will have to wait. Some of you will wind up keeping more than others based on your location, shout out to my Big Law attorneys in TEXAS!

No matter your situation, the question remains the same, what should you do with your bonus?

Over the years I’ve seen clients do many different things. Some take a chunk out of their loans while others choose to buy something nice or take a vacation. Some look to invest this money in hopes of setting up their future selves for success while others park their money in cash in case they take a pay-cut in the coming years. Whatever you’re going to do I’d say it’s a safe bet to assume you’re probably already thinking about it.

I don’t know any of your situations so I’ll tell you what I would do.

1. Knock out any CC debt I haven’t been paying off.             

  • Interest rates on CC debt can be a killer with the average rates sitting at over 24%!!! 

2. Pay down any student loans with rates over 5% (unless you can refinance).

  • For myself I use 5% as the ballpark number for debt. If I can get debt rates to 5% or below, then I will pay them on schedule and invest anything above the payment. Rates have been dropping so you may be able to refinance those loans at more favorable rates going further.

3. Invest some of it.

  • Hopefully you weren’t counting on your bonus like Clark Griswold. If that’s the case, then it really is “found money”. Consider investing some of that, your future self with thank you.

4. Treat Yo’ Self

  • Tom & Donna will tell you Treat Yo’ Self day was a few weeks ago, but that doesn’t mean you can’t indulge.  After all, you billed how many thousand hours this year? Personally, I’d opt for a nice vacation or an awesome Date-Night with my wife in the city. Even better yet, treat yo’ self and others.


So, how are you planning on spending your BONUS?!


For Educational Purposes Only – Not to be relied upon as financial, tax, or legal advice. 7236804RG_Oct26