Financial Planning

What should I do with the bonus I just received?

Don’t spend it all in one place!. Here are six simple ways to not mess up your personal finances. Better ways to keep your newfound wealth courtesy of Manulife Singapore are just a scroll down away.

Congratulations! Despite the listless economy, you’ve secured an increment and / or a bonus this year. Some of your friends will be asking how in the world you pulled that off, but you’ll be too busy spending this newfound fortune for idle chit-chat. Right?


While some might fall into the trap of lifestyle inflation — the increased spending that comes every time you get access to more money, securing your spot in #debtnation — you will not. You won’t because you’re a sensible human being, and you’ve worked hard for this money. You might have made a few bad calls with money in the past, but you also get money-wiser every time you get money-richer.

Don’t spend it until you have it

So you’ve heard the water cooler rumours and even directly from your colleague in Finance who has you sworn to secrecy. The company might have even have given you a letter stating the amount of money you will be receiving. It doesn’t change anything: No spending until it actually hits your bank account. This way, you don’t fall victim to careless speculation and you know exactly how much accessible cash you have after your CPF deductions.

happy girl with shopping bags

Pay off your credit card debt

If you don’t pay off what you already owe, you will never accumulate what you make. Plus, you know you’re going to use that credit card to spend some of your bonus, so bring that credit availability back up to its original height before you let ’er rip.

Build your freedom fund

Some might call it an emergency fund, but freedom fund sounds more like something you want to run towards. Effectively, this is money you set aside in the unfortunate event that you lose your job or feel like you can’t stomach another WIP meeting with your boss. Figure out how much you need to happily survive a month, and multiply that by the number of months you will need before finding a new source of income. Then add a month for good measure. 6 to 12 months is a good guide.

Start your retirement savings

There’s no better time to kick-start something for your future than when you have an influx of unexpected cash. Think you only need to plan for retirement when you hit your 50s? Think again. We don’t need to go into the horror stories of unprepared aging — you probably have an uncle or aunt who is walking proof. Small amounts of money set aside over an extended period of time also means you’re more likely to stay the course, and might even have a shot at early retirement if you start today. Speak to a financial planner who understands your retirement needs.

Take the opportunity to loosen your monthly budget

On a tight budget? Time to loosen those purse strings, but be very specific with where your additional funds will be going. For example, add an additional S$50 dinner out a week, or get that Pilates course you’ve been eyeing to get fitter. Cook with better ingredients, or bring more music into your life. Make sure it’s measured in a way that is easy to track so you don’t find yourself back on the penniless bandwagon before too long.

Treat yourself (or others)

Here’s the one you’ve been waiting for. Go for a fancy dinner, a shopping spree, or set some money aside for that epic road trip you’ve been talking about. Just make sure reward and enjoyment is duly delivered to your system because you deserve it. But only after you’ve duly considered Points 1 to 4. Consider donating some money to a charitable cause. Not only will you be helping people in real need, you will also be feeding your soul.

As a general guide, the 50/30/20 rule is widely believed to work for most of us: Use 50 per cent to pay off your debt, save 30 per cent, and have fun with 20 per cent. This should vary depending on your specific financial situation (though we can tell you now that using half of your bonus for “fun” doesn’t end up being fun), so it’s always a good idea to speak to someone who does this for a living, just to be sure.

For more ways to get ready for your life ahead talk to friendly financial planner from Manulife Singapore.


These insurance products are underwritten by Manulife (Singapore) Pte. Ltd. (Reg. No. 198002116D). This advertisement has not been reviewed by the Monetary Authority of Singapore. Buying a life insurance policy is a long-term commitment. There may be high costs involved if you terminate the policy early, and your policy's surrender value (if any) may be zero or less than the total premiums paid. Buying health insurance products that are unsuitable for you may affect your ability to finance your future healthcare needs. This advertisement is for your information only and does not consider your specific investment objectives, financial situation or needs. It is not a contract of insurance and is not intended as an offer or recommendation to purchase the plan. You can find the full terms and conditions, details, and exclusions for the mentioned insurance product(s) in the policy contract.

This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC web-sites ( or

We recommend that you seek advice from a Manulife Financial Consultant or its Appointed Distributors before making a commitment to purchase a policy.

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