Your year-end bonus has been paid into your account. So what happens next?  If you’re like most people, you may plan to use it over the festive season; to purchase Christmas gifts, dine out with friends, and maybe buy yourself a little something which you’ve been eyeing all year.

But before you even get to the New Year, you will have nothing left of that bonus – nada! And then it’s back to relying on that credit card to make ends meet again for another 11 months!  If this scenario sounds familiar to you, Danelle van Heerde, Head of Advice Processes and Tools at Sanlam says you are not alone. She shares some tips which can help you break this cycle.

“The trick is to avoid spending your bonus on things that you can’t even remember, and the best way to do that is by implementing a concrete plan,” she says.

Put it out of reach

One thing you have to be super careful about is letting your bonus lie in your account. Chances are you will spend even more than the bonus amount you received, ending up in a worse financial position than before you received your bonus. So, move your bonus out of sight and out of reach as soon as you’ve received it.

If you plan to invest your bonus or pay off debt, do it immediately or even put a debit order in place if you need a little nudge. Consider other options, too. For instance, if you can arrange with your child’s school to paynext year’s school fees in advance, on which most schools offer a discount, consider using your bonus for that as soon as you receive it.

Have a plan

Depending on your current financial situation, it is usually a good idea to use a windfall such as your bonus to bulk up your savings, pay off debt or invest in something that offers future returns.

This is your opportunity to do something about your desire to save more or pay off debt, but make sure you have a concrete plan. Don’t just let your bonus disappear within your finances. Define what you are going to do and commit to it. Call your financial services provider or retailer to make plans upfront to pay off your debt on the day you receive your bonus, or to have your account debited for the amount you wish to invest or save.

Reward yourself

The key to ensuring that your plan is successful is to be realistic about how much you’ll save and how much you’ll spend. If you’re the average person, you are unlikely to save your entire bonus and, if you do, you are likely to tap into debt again to cope with the pressures of festive season spending – unless you already have savings in place for this period.

When spoiling yourself, it is better to identify something concrete to do or buy that will give you satisfaction – rather than spending your bonus on a number of smaller things that won’t give you as much satisfaction.

Involve your friends

There may be others around you in a similar financial situation. It may be helpful to find a friend or two and plan activities together that don’t cost a lot of money. You can even implement a challenge where everyone comes up with a suggested activity. Setting up a challenge to repay debt with friends who find themselves in a similar situation is also not a bad idea. You can do it in the same manner as a gym challenge. It’s about having the support of like-minded people!