For many professionals, July marks the bonus season when mid-year or performance-based bonuses hit their accounts. While it’s tempting to celebrate with a big purchase or spontaneous trip, this extra income offers a valuable opportunity to strengthen your overall financial picture, if used strategically.
Turn Windfall into Long-Term Progress
Bonuses provide a chance to make meaningful financial progress without altering your regular cash flow. The key is intentional allocation. Before spending the bonus, take a moment to evaluate your goals: are you focused on reducing debt, boosting savings, or investing for the future?
One strategy is to divide your bonus into three parts:
- Debt Reduction – Pay down high-interest credit cards or personal loans.
- Short-Term Savings – Add to your emergency fund or earmark funds for an upcoming expense (vacation, tuition, home project).
- Long-Term Growth – Contribute to a taxable investment account or retirement savings.
Make It Tax-Efficient
Bonuses are typically taxed at a higher supplemental rate when paid, but that doesn’t mean they’re tax-efficient overall.
Consider options like:
- Increasing your 401(k) contribution percentage temporarily to shelter more of the bonus in a tax-deferred account.
- Using a Roth IRA contribution (if eligible) to grow your bonus tax-free for retirement.
- Funding an HSA if you’re enrolled in a high-deductible health plan. This gives you triple tax advantages: deductible going in, tax-free growth, and tax-free withdrawals for qualified healthcare expenses.
Aligning Your Employer Benefits
After receiving a bonus, it may be an ideal time to review employer-sponsored benefits. For example, contributing more to your 401(k) or profit-sharing plan may unlock additional matching dollars. Some employers allow bonuses to be earmarked separately from regular payroll for benefits; this flexibility can work in your favor if planned early.
Whether you want to reduce taxes, invest, or adjust your financial goals mid-year, let’s connect and make the most of this opportunity.
Have a great weekend!
Golf Tip of the Week
Hit It Straight: Aaron Rai’s Alignment & Balance Drill
Want to improve your driving accuracy? Tour pro Aaron Rai, known for leading the PGA Tour in driving precision, credits his consistency to a simple yet effective drill:
- Check your balance at setup – Place an alignment stick along your target line and stand on it during your setup. This forces proper weight distribution through the center of your feet, avoiding leaning on toes or heels.
- Keep your turn centered – With better balance, your backswing becomes more inside-out. Rai avoids sliding onto his trail foot, maintaining rotation around a steady axis.
- Match tempo to the shot – Raiders warned different clubs require different swing speeds. He modulates tempo for each shot to avoid swinging too fast or too gentle.
Try this drill next time you’re on the range, balance first, then power. Read the full article on Austrailian Golf Digest.
Golf Tip adapted from Australian Golf Digest. Read the full article here: He’s the most accurate driver on the PGA Tour – this is his basic advice for you
Recipe Tip of the Week
Strawberry Mojito Pops for National Mojito Day
In celebration of National Mojito Day (July 11), enjoy this refreshing Strawberry Mojito Popsicle—a kid-friendly, adult-approved twist:
Ingredients (makes 4 pops):
- 1½ cups fresh strawberries, quartered
- Juice and zest of 1 lime
- ¼ cup mint leaves
- 2 tbsp agave nectar (adjust to taste)
- 2 oz rum (optional)
Directions:
- Blend strawberries, lime juice, zest, mint, agave, and rum until smooth.
- Pour the mixture into popsicle molds and freeze until solid (~4 hours).
- Serve chilled.
Recipe Tip adapted from Oh My Veggies. Read the full article here: https://ohmyveggies.com/strawberry-mojito-popsicles/
Travel Tip of the Week
Why Fall Travel Is the Smart Choice
As summer winds down, fall (shoulder season) emerges as an ideal time to travel. Travel + Leisure highlights:
- Cooler weather & lighter crowds make exploring more enjoyable and stress-free.
- Lower costs for flights and lodging than peak seasons.
- Stunning experiences like foliage hikes, wine country tours, and harvest festivals abound.
Planning tip: Think of fall as an opportunity to swap summer chaos for calm, cost savings, and cozy destinations.
Discover fall trip ideas and travel inspiration on Travel + Leisure in the link below.
Travel Tip adapted from Travel & Leisure. Read the full article here: Fall Vacation Trip Ideas
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