I hope your holiday brings some unexpected financial cheer. A bonus, perhaps. Or a generous check from dear Aunt Sally and Uncle Bob. Or maybe you're just enjoying the boon of lower gas prices; it's estimated that the average household will have spent about $700 less this year keeping the tank full. I know how tempting it is to think of five great things you could spend that money on right now. But whether your windfall is $100, $1,000 or more, I want you to make the most of it. Please slow down and plot your strategy, keeping these things in mind:

Your bonus might be taking the place of a raise.
Before the 2008 financial crisis, an annual pay raise of around 4 percent was the norm. Since then, the average has dropped to about 3 percent. At the same time, many employers have increased their budgets for bonuses. (Employers like bonuses because there's no commitment: They can be decreased at any time or not paid at all.) If your salary increase hasn't been very generous, I want you to think of any bonus you receive as earned compensation, not a gift. Psychologically, that shifts how you might handle the money.

Pay your cards right.
I don't want to belabor this, but it must be said: If you have credit card debt, paying it down is a seriously smart move—especially now. The roughly 13.5 percent average interest rate on credit card debt is bad enough, but with the Federal Reserve expected to raise short-term interest rates, credit card rates will rise as well. Just before 2008, the average was closer to 15 percent.

Play a little.
If you don't have credit card debt, I want you to set aside 20 percent of your windfall for an all-out splurge: the pair of shoes you can't stop thinking about or the fancy restaurant you've been dying to try.

Tip: Spend some of that 20 percent forward. Research has found that spending on someone else—even just $5—can boost your happiness level.

Save a lot.
My prioritized list of what to do with the remaining 80 percent of your windfall:

1. Emergency savings. Six in ten Americans say they don't have enough cash available to cover an unexpected $1,000 hospital bill. If you're one of them, here's the chance to jump-start your emergency fund.
2. Pay down student loan debt.
3. Max out on a Roth IRA.
4. Put more in your 401(k).
5. Make an extra mortgage payment. If you plan to stay put, one extra mortgage payment per year reduces the payback time on a fresh 30-year mortgage to 26 years, saving you boatloads in interest.

And remember: There's a universal tendency to justify spending today instead of saving for tomorrow. We tell ourselves, "It's such a small sum, and I deserve a little fun...." But I imagine you've heard the one about little acorns growing into mighty oaks? Here's the money corollary: If you were to invest $500 of a windfall each year for the next ten years, your $5,000 investment would be worth nearly $8,000 in ten years. And if you left that amount to keep growing for another 20 years, you'd have around $25,000 (assuming a 6 percent annualized return).

Don't forget the kid stuff.
Your children may be coming into some money as well if they have relatives who mark the holidays with financial gifts. I think it's important to create family rules for how this money is handled, and I suggest a three-bucket approach:

Bucket 1: All theirs. Butt out. They can spend it or save it. This is a great way to teach financial responsibility.
Bucket 2: Save it for college. It might not make a dent in the actual bill, but it starts a conversation about the cost of education.
Bucket 3: Pass it on. One of the best gifts you can give your children is an appreciation for compassion and sharing. Let them choose a charity and give you the money they want to donate; you write the check or make the credit card payment.

What percentage goes into each bucket? I'll leave that to you. Enjoy your windfall, and may it come again next year.

Suze Orman's latest book is The Money Class: How to Stand in Your Truth and Create the Future You Deserve.


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