November 2026 Finance Newsletter: What To Do With Your Bonus

GETTING A BONUS IS GREAT BUT, as it does not happen every day, you want to make sure that you spend it wisely. The best use for your bonus will depend on whether you have a negative or positive monthly cash flow.

NEGATIVE CASH FLOW : You have a negative cash flow if you cannot afford to pay all your debts and expenses each month.

 If you have a negative cash flow, you should first use your bonus to pay the arrears on your overdue accounts. This will prevent your credit providers from taking legal action against you or repossessing your property. It will also minimise the negative effect on your credit report.

Once you have paid off your arrears, you should use your bonus to pay off your unsecured debts, which includes:

•             Personal loans

•             Credit cards

•             Retail accounts

•             Overdrafts

•             Other debts with interest rates between 25% and 60% per year.

Because these debts usually have the highest interest rates, paying them off early will save you money in the long term and make more money available in your monthly cash flow for “have to” costs.

Once you have done this, you can follow the steps for positive cash flow, below.

POSITIVE CASH FLOW : You have a positive cash flow if you can generally afford to pay all your expenses and debts each month. If you have a positive cash flow, the first thing you should do with your bonus is to pay off your unsecured debts to make more money available in your monthly cash flow for:

•             Saving for emergencies or unplanned events

•             Creating wealth

•             Improving your retirement portfolio

If you have paid up your unsecured debt, or you don’t have any unsecured debt, you should use your bonus to pay towards your mortgage bond. This will lead to a long-term saving as you reduce the outstanding capital and, consequently, the future interest on your bond.

You will also have the advantage of easily accessing these funds in case of an emergency, or unplanned expense if you have an access bond facility on your bond.

SHOULDN’T I RATHER INVEST MY BONUS IN A SAVINGS ACCOUNT RATHER THAN MY BOND?

No. The positive interest you will earn on a money market account will usually be less than the negative interest which the bank charges you on your bond and other debt. The average money market rate is between 4% and 7%, while the interest on your bond is between 8.5% and 10.5%.

Therefore it is only a good idea to invest surplus amounts in a money market account if you do not have a mortgage bond, or if your mortgage bond has been paid up.

WHAT ABOUT INVESTING IN THE STOCK MARKET?

You have worked hard for your bonus, so please do not spend it:

•             gambling on the unpredictable stock market

•             predicting currency or commodity prices, or

•             trying to time the market

REMEMBER:

•             Stick to basics

•             Invest in long-term wealth creation

•             Save for what you need instead of accessing credit

•             Save money for emergencies