Of Books and Baseball Caps

I am very fortunate to receive performance bonuses at work on a semi-annual basis.

They vary in size, given their nature, but tend to be fairly lucrative. (Score one for the 9-5).

In other words, I could choose to spend the money on some fairly big ticket items if I saw fit.

Because I don’t include the amount in our family’s regular budget, the money is rarely spoken for when it arrives.  In fact, it feels a bit like a windfall.

I exclude it from our budget for two reasons. First, I don’t always know in advance what the amount will be, and although they never have done so, my company could opt out of paying it altogether.

Change of Mindset

There was a time when I would look for ways to justify spending most of my bonus on luxury items and other non-essentials.  Trust me, there are plenty of electronic gadgets sitting around my home as evidence of that.

In recent years however, I’ve become more purposeful with all of my money, including my work bonuses.

Nowadays, rather than caving to the impulse purchase, I treat myself to one small item.

Today, it was a Minnesota Twins baseball cap. (Our dog ate my last Twins cap a couple of years ago, a week after I’d bought it).

Other times, I’ll buy a book.  I read a wide variety of books, but for these occasions it’s usually a mystery novel, usually something by Michael Connelly.

The (very simple) point I’m making is that the more I resist the impulse to spend, even the smallest pleasures, such as books and baseball caps, feel more and more like true luxuries.

So, for those times you find yourself blessed with a financial windfall, no matter how large or small, be careful not to squander it.  Resist the urge to spend big by treating yourself to a simple indulgence, then with the remaining funds, take the opportunity to gain more financial freedom.

More financial freedom might look different for everyone.  It could be paying down credit card debt, topping up your emergency fund, investing the money, or using it to bless someone else.

How I Am Allocating My Bonus

In case you were wondering, here is how I’m allocating the remainder of my bonus money….

• I’ll apply a lump sum payment onto our mortgage.
• A small amount will go into retirement savings (RRSP).  It’s a spousal plan held in my wife’s name, to which I am the contributor, for tax purposes.
• The largest portion will go into my Tax Free Savings Account, which is invested in dividend paying blue-chip stocks, and index funds.

I did leave out one detail, one other way I’m spending my bonus money, but definitely my favourite one….on my wife.

Mrs. MMM rarely spends money on herself.  In fact, on a regular basis I have to convince her to buy even the things she needs.  But when extra funds come in, I think she’s slightly more willing to allow me to spend money on her.

So yesterday, I took the day off, and we went shopping.  She got her hair done, bought some new summer clothes, and we went for lunch.  It was a great day, and the most fun I’ll have spending my bonus.