It’s the time of the year again, where Orchard Road is lined with bright glittery lights, and Xmas trees standing proud and tall in malls. My hubby and I headed to town last Saturday, hoping to do some early Xmas shopping for our yearly gift exchange with friends. But alas, the crowded mall and long lines at cashiers turn us off and we head straight to queue for our dinner instead. It’s the time of the year whereby people are generally in a good and giving mood, and it’s not just because Xmas is a few weeks away. “Most of these people must have gotten their year end bonus and increment!” I told my hubby, and he nodded in agreement! Having (more) money always put people in good mood.
So what do most Singaporeans do with their year end bonuses, after working hard for a full year? I guess it can be broken down into a few categories:
1) Buy, buy, and buy:
During the first two years of my working life, my bonus allows me to buy things I couldn’t afford to buy during the past 11 months with my miserable monthly salary. This happens to a lot of people. We see bonuses as a mean whereby we can finally buy what we have been lusting over the past months. It usually involve some big ticket items like a designer bag, gadgets, upgrading of cars etc. For boyfriends and husbands, it means splurging on your beautiful girlfriend or wife, and you get her a Tiffany and Co earring, or a Pandora bracelet for Christmas. For parents, it means buying the Wii game set or the latest iPad Air that your kid had been begging you for the past one year. For newly weds, it means a nice painting for your new home, or getting the matching set of cutleries that you absolutely need. For the materialistic princess like I was, it means getting the latest designer bag to outshine your colleagues.
2) Clearing credit card balances:
I started carrying a balance in my credit card since the age of 24. The amount started small, like 2-3k in credit card balances, and the first thing I did when I got my bonus was to clear the outstanding amount. It started with one card, then two, then three… Until I lost track of it. I sure hope not many people are like me, for it sure feels lousy to be dumping your hard earned money to repay debts.
3) It disappears from your bank account a few months after you got it:
I can so relate to this! Sometimes, after clearing my credit card debt, there will still be a little bit of left overs, but hey, it just disappears out of thin air a few months down the road. I still remember the first time I had my 5 figure bonus (about 12k after CPF contribution), and I cleared about 4k in debt. I thought to myself, after clearing my debt, I still have 8k left. That’s still ALOT of money for me to save! And I promise myself I’ll save the balance. A month later, I subscribed to 2k worth of my company’s shares, and a few months later, the remaining 6k really disappears into thin air, not to be seen ever again. And then I wonder, how many people are like that?
You save or invest it:
Yes, you decide not to splurge, to save or invest your hard earned money, and watch it like a hawk. How many of us can behave like we did not receive our bonuses, and resist not spending a single dime? I did it with my last year’s bonus. The first thing I did when I receive my bonus was to hunt for a good Fixed Deposit rate. I still remember waking up early on a Saturday morning, with hubby in tow, walking around the mall asking for rates from the different banks. I finally deposited my money with UOB, into a 4 months FD. Albeit some bad decisions and splurging on bags during my honeymoon (yes, the old me resurfaced briefly), I still have my hard earned savings and part of my past year bonus to show for in my bank account. And remember the 2k worth of shares I bought with previous bonus money? It was one of my best money decisions EVER. I sold the shares last year, and 3years down the road from the day I got that bonus, the proceeds still forms part of my net worth (albeit not a lot). I dare say, the rewards associated with saving and investing is way way way greater than splurging on a branded bag or two. And again I wonder, how many people are like that, choosing to save their bonuses rather than spending it.
I’m really really excited about getting my bonus in a few weeks’ time. Not because I have a wish list of things to buy, but for the fact that I’m getting closer and closer to my goal. That is, to retire early to do what I want and whenever I want, and gaining financial freedom.