Got a Bonus at Work? Here’s What to Do First

Advertiser disclosure You're our first priority.Every time. We believe everyone should be able to make financial decisions with confidence. While we don't cover every company or financial product on the market, we work hard to share a wide range of offers and objective editorial perspectives. So how do we make money? Our partners compensate us for advertisements that appear on our site. This compensation helps us provide tools and services - like free credit score access and monitoring. With the exception of mortgage, home equity and other home-lending products or services, partner compensation is one of several factors that may affect which products we highlight and where they appear on our site. Other factors include your credit profile, product availability and proprietary website methodologies. However, these factors do not influence our editors' opinions or ratings, which are based on independent research and analysis. Our partners cannot pay us to guarantee favorable reviews. Here is a list of our partners. Got a Bonus at Work? Here’s What to Do First A bonus can be an unexpected windfall. Financial experts caution against spending it all at once. Written by Kimberly Palmer Kimberly Palmer Senior Writer/Spokesperson 21 years of experience Expertise Personal finance budgeting family finances Kimberly Palmer is a personal finance expert at NerdWallet. She is also the author of three books about money: "Smart Mom, Rich Mom," "The Economy of You" and “Generation Earn.” Kimberly's work also appears at NerdWallet Canada. Published in Edited by Courtney Neidel Courtney Neidel Managing Editor 11 years of experience Expertise Personal finance budgeting shopping Courtney Neidel is an assigning editor for the core personal finance team at NerdWallet. She joined NerdWallet in 2014 and spent six years writing about shopping, budgeting and money-saving strategies before being promoted to editor. Courtney has been interviewed as a retail authority by "Good Morning America," Cheddar and CBSN. Her prior experience includes freelance writing for California newspapers. Published in other Published Apr 23, 2026 Fact Checked How is this page expert verified? NerdWallet's content is fact-checked for accuracy, timeliness and relevance. It undergoes a thorough review process involving writers and editors to ensure the information is as clear and complete as possible. More on our editorial rigor SOME CARD INFO MAY BE OUTDATED This page includes information about these cards, currently unavailable on NerdWallet. The information has been collected by NerdWallet and has not been provided or reviewed by the card issuer. The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.A Reddit poster recently asked how others plan to spend bonuses from work. Will they save the money? Or will they splurge?The responses were as varied as Reddit users themselves. Some said they’d save, pay off student loans or take care of auto debt. Others mentioned splurging on something a little “extra” like a luxury scarf or hair styling appliance. Some respondents even shared percentage-based formulas for allocating bonuses to a mix of savings, debt and fun spending. That’s the kind of nuanced prioritization the financial experts I spoke with encouraged. “The first question should be, ‘Where are you in your bills, your savings?’ After that, it’s fun,” says Kelly Gilbert, fiduciary advisor and owner of EFG Financial, a firm in Grand Rapids, Michigan. But there’s a lot of advice that fits in between, especially because bonuses can differ from other types of windfalls. They’re often expected around the same time each year — but they’re not guaranteed. How you spend your bonus is up to you, but here’s what to consider when you get one.Pay off high-interest debt and beef up savingsGilbert says high-interest debt (e.g., from credit cards) should be a top priority. “Get rid of that unsecured debt — that’s a great investment,” he says. Also at the top of the list? Saving.“I love to see people build or reinforce their safety net. If you don’t have two, four or six months’ worth of expenses in place, a bonus can help jump-start that,” says Skip Skolnik, senior planner and founder at Skolnik Retirement Solutions in Amherst, Ohio. If you already have an emergency fund in place, then Skolnik suggests adding to it or earmarking funds for upcoming expenses such as a home renovation. Meet MoneyNerd, your weekly news decoderSo much news. So little time. NerdWallet's new weekly newsletter makes sense of the headlines that affect your wallet. SUBSCRIBE FOR FREE Invest in yourselfAfter taking care of high-interest debt and shoring up savings, Gilbert urges people to put money into self-improvement. That could be a new training or certification to advance your career. It could also include personal coaching or some other kind of life or career enhancement. Perhaps a gym membership or mental health therapy makes sense. “Always invest in yourself,” he says. A bonus is a particularly good tool for self-investment since you earned it from your hard work. Splurge a littleNext, allow yourself to have a little fun, Gilbert says. He adds that it’s OK to allot some of the bonus to a splurge, as long as you’ve already taken a close look at those other priorities first. “I have no problem with people spending money, as long as it’s intentional,” Skolnik says. In fact, he has a formula for bonus allocation: Take 50% and invest it in your future through a savings or investment account, use 30% to pay off high-interest debt and use 20% to have some fun.That breakdown echoes the 50/30/20 budget, where consumers spend 50% of their take-home pay on needs, 30% on wants and 20% on savings and debt payments. Skolnik cautions against allowing a bonus to lead to lifestyle creep — where your expenses follow your income trend — especially if a bonus isn’t guaranteed.Also, he says to think hard before going after the new car or boat, which will come with ongoing costs.Plan aheadTaxes may not be withheld on bonuses at the same rate as the rest of your income, and if that’s the case, you may need to set money aside to cover a surprise bill when taxes are due. That’s one reason bonuses can differ from other types of windfalls. “Some people don’t worry about taxation and hope for the best, but hope is not a strategy,” Gilbert says. If a bonus is a regular and recurring thing, be ready for it. “I would suggest creating a plan before that bonus shows up,” he says.That way, when it does, you already know how to apply it in meaningful ways, versus using it impulsively.“You’re ready for it and you know what to do,” he adds.Reddit is an online forum where users share their thoughts in “threads” on various topics. The popular site includes plenty of discussion on financial subjects like how to spend bonuses, so we sifted through Reddit forums to get a pulse check. People post anonymously, so we cannot confirm their individual experiences or circumstances. Explore more onThe Financial Glow UpMoney News You Can UseMaking MoneyPaying Your BillsPersonal Finance Back to top Related articles Get Your Free Credit Score By NerdWallet How to Pay Off Debt: Top Strategies for 2026 2 By Lauren Schwahn, Jackie Veling 50/30/20 Budget Calculator 2 By Amanda Barroso, Elizabeth Ayoola