If you’ve been tightening your belt for ages, it’s great to get extra money like a year-end bonus or a stokvel payout. It’s natural to want to let off some steam and celebrate. Don’t spend it all on good times and entertainment, though.

Sure, you deserve to have some fun after a year of hustling and hard work, but you can also create a bonus budget as you would with your normal monthly income. In other words, spend only a small portion on festivities, and put the rest of the money towards investments that add long-lasting benefits to your life.

Investing money in your long-term financial goals is an important part of building a better life – after all, achieving your financial goals makes it easier to achieve all your other life goals. But don’t think of investments only in financial terms. You could also spend a part of your windfall on other ways to improve your life, with benefits that will continue long after the memories of a wild New Year’s Eve party have faded.

Life benefits to consider investing in

• Your financial goals
  There are several ways in which you can use extra money to improve your financial situation. Paying off some of your debt with a lump sum means that you’ll pay less total interest, while adding a lump sum to your savings and investments means that you’ll earn more interest in the long run. Both are strategies worth considering, and both will be even more rewarding if the South African Reserve Bank starts raising interest rates again.

• Your January expenses
  If you’re a parent, the end of the year is when you’ll be thinking about paying school fees and buying uniforms and school supplies. If you use your stokvel payout or Christmas bonus to do so, you won’t have to pay those expenses out of your normal paycheque.
  
  And if you pay a year’s school fees in a lump sum rather than monthly instalments, you usually get a discount.
  
  Alternatively, you might be moving to a new home or city to start a new job – a bonus could help you cover moving expenses. Whatever extra costs the new year brings, it makes financial sense to cover them with your bonus money rather than your regular income.

• High-value assets 
  Financial products like notice accounts, fixed-deposit accounts, and unit trusts are not the only way to invest – you can also include assets like art, jewellery, or valuable collectibles in your wealth portfolio. Choose assets that will increase in value over time, and they will not only give you the pleasure of ownership, but they should also make you a profit if you ever decide to sell them and use the cash elsewhere. A cash windfall is a golden opportunity to start collecting high-value assets, or to add to your collection.

• Your future prospects
  Are you keen to study for a degree, diploma, or certificate that will help you get a better job? Are there tools or equipment that would enable you to turn your DIY skills or your hobby into a profitable side hustle? If you’ve identified anything that you could use to make your future brighter but that you haven’t been able to afford till now, consider putting your stokvel payout or 13th cheque towards that.

• Your comfort at home
  Your annual bonus may not cover the cost of installing a solar power system, but there are many portable, more affordable solutions to load-shedding that you can explore. Or consider replacing some of your home appliances with energy-efficient upgrades to lower your electricity bill and reduce the need for load-shedding. Regular power cuts have made many South Africans realise that we need to be more self-sufficient in general, not just when it comes to electricity.
  
  Apart from power solutions, you could also put your bonus money towards building a vegetable garden, or installing a rainwater tank to water your garden, refill your swimming pool, and reduce your municipal water bills. From creating a playground for your children to redecorating key spaces, there are many ways you could use extra money to make your home a more comfortable, attractive place to live.

• Your emotional well-being
  Making your home more welcoming is one way to boost your mental and emotional well-being, but don’t rule out other forms of self-care either. It’s much harder to plan financially and achieve life goals if you aren’t taking care of your spiritual needs. From that perspective, looking after yourself emotionally and reducing your stress are also investments in a better future.
  
  Whether that means a soothing weekend at a spa or an adventurous getaway to enjoy extreme sports, don’t feel guilty about spending some of your bonus on unashamed self-pampering. If it lets you to return to the daily grind revitalised and ready to take on the world again, it’s money well spent.

Explore the range of savings and investment accounts that Nedbank offers to help you grow your wealth.