3 Smart Ways to Use Your Holiday Bonus

More than half of employers (54%) said they planned to give holiday bonuses in 2015, up from 47% in 2014, according to a new survey from CareerBuilder. (Sadly, only 14% plan to give more than last year.) If you happen to be one of their lucky employees, perhaps you’re wondering how to put that cash to use. Fortunately, we have some ideas.

1. Sock It Away

Study after study highlights Americans’ poor saving habits. Without emergency savings, you could struggle to afford necessities or wind up in debt due to unexpected expenses. Take advantage of the extra cash by stuffing it in a high-yield savings account or investing account, where the money is sure to work for you.

2. Pay Down Credit Card Debt

Millions of Americans carry some sort of debt, be it credit card balances, student loans, a car payment or mortgage. You could save more by accelerating these debt repayments, so consider tackling a debt with a high interest rate. Credit card debt is particularly hefty, and paying off some of your balance could go a long way in building your credit score: the closer your balance to your limits, the lower your score. A big payment could help you become debt-free while boosting your score in the process. You can track your progress every month using your free credit scores on Credit.com.

3. #TreatYoSelf

As you work toward your goals, reward yourself to stay motivated. Depriving yourself can sometimes backfire, leading to a frustrated spending binge. Whether your it’s small or Wall Street-sized, your bonus can improve your finances, even by a little bit. It might be most productive to mix strategies — pad your savings, make an extra loan payment and visit that restaurant you’ve been wanting to try — but everyone’s different. Do what’s best for you and try to start 2016 feeling good about your finances.