There’s nothing quite like the joy of receiving a bonus at work. Whether it’s part of your compensation or a christmas surprise from your company, a bonus feels like an extra pay day at the best possible time. 

But what should you do with that bonus? Let’s agree that spending it all is not the best option. Let’s maybe also agree that sticking it all into savings is no fun either. So how much should you spend, how much should you save, and how should you save it?

We have three different suggestions for you, based on your personality. Each one has its advantages but every one of them has a good mix of fun and responsibility. 

Big Spender 

This one is for those of you who want to live large. You’ve either met your savings goal, or you just like being a little reckless. Either way, it’s time to splurge.

Here’s how you’ll break down your bonus:60% you can spend‍

20% goes into savings or ETFs‍

20% gets invested into stocks‍

The biggest part of your bonus will be going on something fun. It’s a good idea to pick your big purchases out ahead of time, but with this much money at your disposal, you can also just go wild. 

The rest will be divided equally between savings and investments. Build up your rainy-day fund a little, or invest into a low-risk ETF like the S&P 500 or Dow Jones Industrial Index. Since you’re living for today, another 20% can go into your favorite stocks. This move carries more risk, but can also give you a bigger return, and since you’re not worried about your savings, a little risk is fine for you. 

The Moderate

You want to spend a little, but you’re also keen on building up your savings. You want to help your savings goal along, or get a head start on it. You’re not risk-averse, but you also don’t want to lose 20% on your investments in a month. 

Here’s how you’ll break down your bonus: 40% you can spend ‍

30% goes into savings ‍

15% goes into an ETF ‍

15% goes into stocks ‍

This breakdown allows you to still spend nicely. Almost half your bonus can, depending on how big your bonus is, still mean a big-ticket purchase. 

Your savings are next. This is a separate Pocket that you don’t touch, and keep as a fund for a rainy day. 

You’ll divide what’s left over between an ETF and stocks. If you want to avoid risk, you can invest in a large company that’s known for predictable dividends and lower volatility. If you want to chance it a little, you can invest in a smaller company you think is going to make it big. Either way, you’re not risking too much of your money. ‍

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The Conservative ‍

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You don’t want to spend at all. Or maybe just one nice dinner. But most of all, you’re keen on building up those savings. Risk is a board game you play, not something you tolerate for your investments. 

Here’s how you’ll break your bonus down:

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20% you can spend 

40% you put into savings 

40% you invest into an ETF

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This method means you hold on to 80% of your money. Half of that will sit idle in savings, ready if you need it in an emergency. The other half you’ll invest in a large ETF, a comparatively safer bet compared to investing in a stock. You’ll have the chance to grow it a little, but most importantly you’re holding on to most of it.