The more fortunate among you may have just been informed by your employer that you will get a generous end-of-year bonus coming your way for all your hard work during the year.

If this is you, make a plan so that you don’t wake up a month or two later and realise that it’s all gone.:

Start by paying off your debt

One of the reasons why people don’t save is because they are struggling with overwhelming levels of debt.

Therefore, your priority should be to take your bonus and pay off any outstanding debt you have. The best option is to use your bonus to reduce any short-term debt obligations that carry high interest rates, such as personal loans.

Start investing for your future

We all aim to put away a certain amount of money but somewhere along the way, we lose sight of that goal and stop trying altogether.

The change from being a spender to a saver begins with attitude. You must start to look at savings as a reward rather than a punishment.

It is important to remember that to be a successful investor, you first need to be a successful saver. Saving is the first and most important step, and investing your bonus may help you achieve your financial goals. You can start an investment from as little as R500 a month.

Don’t store your bonus in your bank account

You don’t want to make it easy for yourself to whip out your debit card and blow all that money in the blink of an eye. So, before you do anything, put the bulk of it out of sight while you decide what to do.

The temptation to splash out on that big screen TV you so desperately want (but don’t really need) becomes very real. While big-ticket purchases certainly bring short-term satisfaction, you need to weigh up the opportunity cost of not using that hard-earned money more effectively.

Put money aside for emergencies

Our brains are naturally wired to prioritise short-term happiness. As a result, some people completely avoid thinking about potential negative events like emergency expenses, ill-health or retrenchment.

However, not thinking about these events doesn’t mean they won’t happen. A financial safety net can protect you against unexpected lifestyle changes and increases in the cost of living. Not using your bonus wisely may mean that you are forced to use a loan or tap into your retirement savings during an emergency.

Pay future expenses in advance

Look ahead to next year and think about any large expenses coming in. Another smart move is to pay off some future expenses in advance – your future self will certainly thank you for it.

You could pay your child’s school fees ahead of time, for instance, or an insurance policy upfront for a year. This will help you free up some of your monthly budget and reduce the tendency to live from hand to mouth.