Good Financial Reads: Bonuses and Cash Gifts

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Catch up on some of the latest posts with this week's roundup:

What Should I Do With My Bonus?

by Meg Bartelt, Flow Financial Planning, LLC

Do you get an annual or semi-annual bonus at your job? I always loved those… But what’s the best thing to do with the money? Thankfully, you usually know ahead of time that you’re going to get bonuses, even if you don’t know the specific amount. They’re described in your job offer or in your performance review. You have plenty of warning that this money is coming, so take some time to create a plan for it! In fact, make your plan specific enough (you know, percentages and names of accounts) that it’ll be like falling off a log to actually do the work when the time comes.

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How to Change Your Life With Your Bonus

by Rebecca Conner, SeedSafe Financial LLC

Surprise! You received a little extra cash for the year. What should you do with an unexpected or year-end bonus? A bonus is an opportunity to start a habit that will change your life for the long-term. Many times, we end up spending bonuses on a present to ourselves for all our hard work. Instead, allocate it toward goals that will pay compounding presents to your future-self!

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Gift and Estate Tax: Special Considerations for Cross-Border Issues

by Jiyao Xu, X and Y Advisos, Inc.

Most Americans do not need to pay the gift and estate tax because of the current high exemption amount. However, like the income tax, which we talked about in "How To Reduce U.S. Taxes On Your Foreign Income?" and in "Do You Need To Report Your Foreign Assets?" before, there are also some special rules governing cross-border issues and immigrants regarding the gift and estate tax.

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What to do When Kids Get Cash Gifts

by Quentara Costa, POWWOW, LLC

Question: What are my options for cash or checks given to my child?

Piggy Bank: Some people enjoy the visual appeal of a full piggy bank. While quaint, it’s not secure from siblings, loss, or damage. I’d keep the piggy for change and $1 bills. Anything more should be directed to a more secure location.

Certificates of Deposit (CDs): Bank CDs offer safety of principal and guaranteed returns. However, interest is subject to tax and current rates are generally low. You’ll also have to keep track of the maturity date so it can be rolled over into a new CD or something else entirely. This may be a convenient placeholder for a parent to use for a very young child, but wouldn’t be my long term recommendation. Same idea applies to a savings or treasury bond.

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Dodge Toys and Boost College Savings

by Quentara Costa, POWWOW, LLC

“85% of parents expect their child to graduate with debt, estimating an average of $45,000 in student loans“ according to a Fidelity survey. In one year you are likely to encounter a handful of opportunities to receive gifts: religious holidays, birthdays, graduations, recognizing accomplishments, etc. If you have more than one child simply multiply. You love throwing a party, but at some point enough is enough with the STUFF! So what can you do?

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