End-of-year means end-of-year bonuses and while many might go straight to the store with theirs, that’s not always the smartest thing to do. So what should you do with a lump sum you may not have expected? Veuer’s Tony Spitz has the details.
Category
🗞
NewsTranscript
00:00End of year means end of year bonuses, and while many might go straight to the store with theirs,
00:04that's not always the smartest thing to do. So what should you do with a lump sum you may not
00:08have expected? Experts say the first thing is to pay off your debts. Debts involve interest
00:13payments, which can bleed you dry over time. This goes double for credit card debt, which
00:17often involves extremely high rates. Chief financial planning strategist at Everbank,
00:22Dan Keady, says you should next look at your retirement accounts and max those out,
00:26telling Bankrate, your workplace plan may allow you to designate some of that bonus,
00:30or all of that bonus, to go into your 401k. That's a great way to save taxes and build
00:35your savings. In addition, he recommends maxing out IRAs as well, as they offer similar benefits.
00:41There are also myriad other places to invest, but if you've got kids and you're looking to
00:45invest in them, you could consider a 529 college savings plan. Director of advisory planning and
00:50digital innovation at Huntington Bank, Stephen Williams, says this is a great way to save for
00:55college without having to worry about market volatility. And when in doubt, investment pros
00:59say it's always a good idea to invest in yourself. That could mean learning a new skill or trade,
01:04using it for career development, or even learning an instrument or a new language.