Saturday, February 20, 2010

Got A Bonus?

This is the time of year when some folks will get either tax returns or bonuses based on last year's work. In my never-ending quest to help more Pagans live economically-sound lives, here are some ideas for what to do if you manage to come into a chunk of change sometime in the next month or so. The important thing to realize is that the universe has just deposited a package of usable energy at your doorstep. How will you use it?

The first thing you have to ask yourself is: "How secure is my job?" If you think that you could be out of a paycheck anytime in the next year, there's only one answer to what you should do with your lump sum: bank it. Bank it in an FDIC-insured bank account, even if they are only paying about 1% interest these days. (Most standard savings accounts are FDIC insured; just ask when you walk into the bank.) You may need that money to pay rent, print resumes, buy bus tokens to go to interviews in the next year. And, once you bank your bonus, sit down and make a list of your debts and the interest rate that you're paying on each one (look at your monthly statement; it will tell you the interest rate). Then, begin throwing all that you can at the debt with the highest interest rate. Thus, if you have credit card debt at 18%, a car loan at 12%, and student loans at 9%, you pay the minimum on the car loan and the student loans and you throw all that you can get, including all that you can get from taking a second job on weekends and evenings, at the credit card debt until it is paid off. Then, you start on the car loan. Finally, if you are worried about you job, NOW is the time to use your health insurance. Get your teeth checked, have your mammogram, fill your prescriptions each month as soon as possible (most plans will let you refill a months' worth of pills in 26 to 28 days. Those few extra pills can add up to almost a month's worth of free meds to be used once you lose your job and your health insurance.)

But if you reasonably expect to hold onto your job for the foreseeable future, there are a number of things that you can do with your bonus or tax return that will really help to make you more comfortable, secure, safe.

1. Put it in savings. If, in these economic times, you don't have between 9 and 12 months' worth of your net salary set aside, you're in real danger. In other words, if you get paid two times a month, multiply that amount by 18 and that's the minimum amount that you should have in FDIC-insured savings. Some of that amount could be in certificates of deposit, which pay a bit more interest but require you to not withdraw your money for a given period, but you really don't need to worry about that until you've got a chunk set aside. It is often taking experienced workers 6, 9, 12 months to find new jobs and those jobs often pay less than their former jobs. There is a law of the universe that requires your roof, your car, or your hot water heater to die just after you lose your job. You need to be able to pay your rent for months and months in case you do lose your job. And, hell, if the economy suddenly rebounds, times are great, and suddenly your prospects are unlimited, you can always use the money to redo your kitchen or take that cruise up the Nile that you've always dreamt of.

2. Go back to school in the evenings. Can you use your windfall to take the computer courses, paramedic certification, or massage therapy classes that would allow you to make even more money, do the job you want, be more secure in your present job? Then do it.

3. Replace the weakest link. What is it that's really not working in your life? An old, fuel-inefficient car that always breaks down? A computer you can't rely on? An ancient and rusty fridge that lets the food go bad? A basement that leaks? A wardrobe that doesn't work in your current job? Do the research, buy the best that you can, and do a ritual to kiss the old frustrations and inefficiencies good bye.

4. Get yourself organized. Go buy a good file cabinet (or two), boxes and boxes of colored folders, a real desk set, a paper shredder, trash bags, and some funky pens. Gather all your stray papers and put them in a pile. Several piles. A room full of piles. Blue files are for "home": make files for warranties, home insurance, repairs, etc. Orange files are for "car": make files for insurance, loan payments, repairs. Green files are for "finances": make files for paychecks, 401(k), savings. Yellow files are for "work": make files for work expenses, forms from work, professional orgs. Pink files are for "health": make a file for each doc, a file for health insurance reimbursement, a file for your advance health directive. Purple files are for "personal": make files for passports, birth certificates, awards. Spend 20 minutes a week filing the papers in your pile. In a year, you'll love yourself for it.

5. Go pay a lawyer to write your will, your power of attorney, and your advance medical directive. I don't care how young you are. You'll feel all kinds of better once it's done. Have fun with it. What causes should get all your money if you die after everyone you love? What songs should be played at your memorial service? It's your stuff. Do you really want your fundie cousin to get it all and give it to her fundie minister? If you have kids and you haven't spelled out exactly who will be responsible for them and how they should spend your money on them (College is ok, but funds to tour with the band aren't? A year to hike around Europe is ok but an MBA isn't? It's your call, but only if you make it), you're being negligent. Do it now. Go out for dinner and a nice glass of wine afterwards. Now, you really can die happy.

6. Go get one of those "executive" health exams. Have your damn mammogram. Buy a home treadmill, or a membership in a gym, or a new pair of glasses. Get your teeth fixed. Buy a mountain bike, a set of free weights, some sessions with a personal trainer who will help you develop a regular exercise routine. Buy a good pair of walking shoes. Finally learn to fence.

7. If you can do it and it works in your life for all the right reasons, now is a good time to make a down payment on a home. Do the research first. Make sure you know about every government incentive program that's out there. Make sure you get a fixed-rate 30-year mortgage. Make sure you get the home inspected. Make sure you've negotiated hard for the lowest price. And, then, throw your bonus into the pot of money you've already saved and do it. There's nothing like committing to a very specific piece of land.

8. Green up. Can you use your windfall to install energy-efficient windows, buy new appliances that use less energy, install a green roof, invest in solar panels that will allow you to sell power back to your local utility? Get on the web, spend an hour doing research, and then go for it. Buy a rain barrel, pay a green company to install insulation, buy some mesh bags that you can use every time that you go to the grocery store.

9. Spend the money on plants. Buy, and get a gardener to install, some trees that will give you shade in the summer so you can cut down on your air conditioning bills. Buy a few fruit trees that will give you fresh fruit for years to come. Put in a vegetable garden that will cut both your carbon footprint and your grocery bill. Buy into a Community Supported Agriculture (CSA) group and have a local farmer deliver food to your door all year long. Pick a color scheme (black/white, orange/yellow, purple/pink) and put a cottage garden outside your door.

10. Prepare for an emergency. You should have at least a few days' worth of food, water, and meds set aside. Take your windfall and buy canned foods, bottled water, basic meds (aspirin, antiseptic, bandaids, etc.), vitamins, etc. Find a good place to store them. I buy one can of something on sale each time that I go to the grocery store. A can of beans, tomatoes, tuna fish. A bottle of vitamins, a box of powdered milk, a few extra batteries. It can, as it has here in the MidAtlantic, snow quite a bit, but it will be a long, long time before I'm starving. Make a list of what you'd like to have on hand in case you are confined to home for a week or two and then go shopping.

11. Finally, here's my one hard and fast rule about bonuses and tax refunds. Set aside 5% for fun and 5% for a good cause. You've got to feel like you're enjoying the money, a little bit. So go buy a lovely scarf and give some money to a candidate you like. Take the family out to dinner and give some money to a homeless shelter in your area. Buy yourself a camping trip and make a micro loan. Buy a tree for your yard and a tree for the local hospice, library, school. Do what will make you feel good.

Money, especially money that shows up as a lump, is just a form of energy. Witches are good at directing energy. How will you direct yours?

Picture found here.


byteb said...

Heartfelt thanks for writing this.

Teacats said...

Brillant posting! And very decent and kind to remind Pagans of the need and necessity to count their pennies -- and practise financial alchemy. Here at Rosemary Cottage -- a small store on EBay keeps things floating along. No health insurance. BUT our bills are paid when due -- and our cars are truly "ours" So there are many reasons to thank Those Who Guard Us every day. Sincerely grateful -- especially for access to the web -- and your blog! :) What are your thoughts about sites like legalzoom for wills, etc.?

Cheers! Jan at Rosemary Cottage

Hecate said...


Glad you liked it; I try not to be too "preachy."


Glad, as well, that you liked it. I don't know enough about the law of your state, not to mention trusts and estate law, to comment on the website. I'm a lawyer, but I paid a lawyer who knows the field to write my will, power of attorney, advance medical directive. My best recommendation would be to shop around for someone who knows your area and see if they won't do it for a reasonable fee. Especially if it's not a large or complicated estate, a lot of local practioners should be able to do it for a few hundred dollars, I'd imagine.

Laima said...

Very good advice, and I hope I can take advantage of it soon - need to get a job first. (Was laid off twice in 2009. Haven't worked in 6 months.)

Long-time lurker, from northern Baltimore county.

Quercki said...

Excellent list.
One small addendum: Credit unions are guaranteed by the NCUA instead of the FDIC. They often have better interest rates than banks. I am writing a series about some of the advantages of credit unions.

For the best rates, check out

Anonymous said...

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