WWYD: A Bonus Time Question

Figuring out what to do with money you’re not counting on.

Hello Billfold Team!

I am due to receive a performance bonus between $3,000–6,000 pre-tax. This will be included on my paycheck that is deposited directly into my bank account and all regular deductions will apply, including 401(k). I have the option to pause the 401(k) deduction, but should I?

Pro-pause: More money to split between debt and savings.

Con-pause: It’s bonus money, so I’m not counting on it, and the company will partially match it.

Right now I’m leaning towards just lowering the 401(k) deduction to split the difference, but I’d love to hear what you and readers think!

This is my favorite kind of question—“I’m getting some money! What should I do with it?”

In the rare instance when I receive money that’s not part of my regular income, my immediate response is to squirrel it away in a savings account and pretend it doesn’t exist. With the money out of sight, out of mind, I would continue to do business as usual.

So what I’m saying is in this particular scenario, I wouldn’t change anything I’m already doing, and would allow the usual 401(k) deduction to happen (and hey, the partial match is nice!). When the rest of the bonus money hits my checking account, I’d throw half of it to pay down my student debt, and put the rest in savings.

What about the rest of you? Would you do anything different?

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