Thursday, March 15, 2007

March Gladness

Oh how I love the month of March. The days are longer, the weather gets warmer, and my net worth gets bigger. Aside from the tax refund I usually get at this time of year, it's bonus time. And yesterday I found out my bonus this year will be about $10,500, about $1,000 higher than last year. By the time taxes and my 401k deductions come out, I'll only see about half of this as cash, but that money will go straight towards shoring up my somewhat depleted savings account.
Working at a job where part of your compensation is a bonus is a great way to save money. Over the years, I have had as much as 37% of my yearly income arrive in one lump sum as a bonus. (Typically it's more like 10-15%.) I like this for the same reason I like using a 401k account, and have never minded too much that I tend to give the government free loans which I get back later as a big tax refund. Not having money day to day is a great way to force yourself not to spend it. It's just a psychological game-- I am not guaranteed to get a bonus or a tax refund, but I kind of assume I will. But despite that, I don't count on being able to spend that money. I try to stay within a budget imposed by my net pay.
Then when the bonus shows up, I don't spend it! This year will be a little different, as I will spend part of it on some remaining furniture that I need for my apartment, mainly a bed. (It may prove more difficult to find a bed than it was to buy the apartment.) But in other years, I've just found that there was nothing that I'd been holding back on all year that I suddenly wanted to buy with my bonus. For me, at least, it's much easier to spend money year round, $100 here, $300 there, if I feel like I have it. But if someone hands me $5,000, I can't imagine just running out and spending it all. Of course I could easily make a list of things I would like to have that would total far more than $5,000, but the reality of life is that I'd never get around to figuring out where to buy them all and actually doing the shopping. And then I forget about it, and the mood passes, and the money's in the bank, and I just think of it as part of my savings, not as a bonus that should be spent as fun money.
Does this mean I miss out on rewarding myself a bit, which is a natural thing to want to do with a bonus? No-- the reward is knowing that I have the money, feeling a sense of security that my savings are growing, and knowing that gives me a little leeway to spend money when I want to throughout the year... even though I sort of said the opposite about how a smaller paycheck makes me spend less. Like I said, it's a psychological game! But it works, and I save money.

6 comments:

Anonymous said...

I'm so with you on the forced savings of the tax return - my husband and I do the same thing. I have a question - how did you get into editing/publishing? What kind of education does that require? Any hints would be great. Thanks!

Anonymous said...

So you work at Lehman..

Anonymous said...

You are one lucky woman...i can't wait to start school and earn more money...i hate my job but do it to make money and go home...do you have Suze Orman's new book? Do you watch her show or read her articles?

Tiredbuthappy said...

I also love that windfall feeling. I sometimes give myself permission to spend, say, a few percent on something fun and frivolous. The rest usually gets split up between my Roth (which I still can't seem to fund out of regular day-to-day savings) and my emergency fund, which gets plundered pretty often for big medical bills and major car repairs and the like.

Madame X said...

Anon 10:49-- a lot of people get into publishing after working in a bookstore, which is what I did. In most cases, you'll be expected to have a college degree, but if you know books, or just have good general business and writing skills, you could get away with not having a college degree.

Anon 1:41-- I'm sure anyone who works at Lehman would quit in a huff if they only got a $10k bonus. I wish I got the kind of bonus those people get.

ANon 8:01-- no I do not have Suze's new book, and I've only seen her show once or twice...

Anonymous said...

Ohh, the joys of buying a mattress. I am delurking to say DON'T scrimp on your mattress. We looked and looked and wound up buying an Englander because it was about $150 less and less than a year later it started getting the body shapes in it. It is a no-flip kind, so you just turn it. Total crap. Our old serta was absolutely wonderful and I would rather have it back, but left it behind for our daughter when moving across states. I am stuck with it for years. Buyer beware.