I have seen some version of this question multiple times, I just want to hear this community's advice on my personal situation.
So, I am a blue collar guy that served in the military for many years (not enough to retire), used the GI Bill to get a BS at a small state school and have kind of just been plugging along (I am in my late 40s) making a pretty normal living, albeit comfortable (mid 80s ). Somehow, someway, three years ago I stumbled into an amazing logistics manager job with a small firm and well…we had a good year. A very good year.
My boss called me in yesterday, and as if with anyone with imposter syndrome, I assumed I was being fired hahah. I wasn't. He told me I was getting a bonus (I have never gotten a bonus- ever, anywhere, except for when I reenlisted haha). And this bonus will be, well…basically the same as my annual salary. I was shocked. I tried to be professional but to be honest, I wanted to cry. I grew up in trailer parks. Those that are from this background understand. And yesterday, I got a lump sum deposit that I have been staring at ever since.
So…yeah. What do I do? I am thinking put in 30% to my HYSA and have, for the first time in my life, a fully funded emergency fund. I think I will put the rest in a Vanguard fund….right?
Finally, I'd like to do something fun. Not much. But maybe a fun weekend trip? I am in so much shock. What would you do? It's just over 50K after taxes.
The perennial question….
byu/Jumpy-Condition1656 inpersonalfinance
Posted by Jumpy-Condition1656
10 Comments
Sounds like you are asking about a framework for what to do with money.
Start with reviewing the Prime Directive in the PF Wiki. It will answer your question and many other questions you didn’t realize you should be asking.
* https://www.reddit.com//r/personalfinance/wiki/commontopics
Dude congrats, that’s absolutely wild and you deserve every penny of it
Your plan sounds solid – emergency fund first is smart as hell, then yeah Vanguard index funds are the way to go. For the fun part, definitely take that weekend trip, you’ve earned it and it’s a good way to celebrate without going overboard
Fully fund that emergency fund – then fund a Roth IRA for 2025/2026 and consider increasing your 401k contributions for the year and funneling most of that money into your retirement.
Absolutely do all the structured things mentioned above (fill up emergency fund, Roth IRA, pay down any debt) but the fun you mentioned is critical. Nothing crazy but always celebrate the wins, even it’s in a small way (don’t buy a new car, overly expensive watch, etc)
Every bonus I get I order Papa John’s pizza. It’s what I bought with my first bonus and I’ll keep doing it as long as I keep getting bonuses, no matter how big! It’s a good reminder for me to take a second to celebrate and be thankful.
Congrats! Keep going!
It was really nice reading this. Congratulations. I have no real advice except to do something nice for yourself and sock away the rest. 30% in a hysa and dividing the rest in a retirement account and a more risky high yield investment seems like a pretty safe equation.
Have that emergency fund fully funded, then put $7000 in a Roth IRA for last year, $7500 in a Roth IRA for 2026.
Now you have around 20k left (if I did the math right). Do something fun – do something much, you *deserve* it. Take 5k and go on an international trip. Go somewhere and enjoy it.
I’ve always allocated 10% of any bonus or unexpected money for something fun: vacation, an investment coat, a special purse, etc.
I grew up with a scarcity mindset, so having a specific percentage associated with the fun spend makes it easier for me to feel ok / not guilty spending it.
Congrats on your performance and your bonus! May continued success be yours.
This happened to me last year. It’s too late to max out your 401k to limit your tax liability, so take a percentage for fun, pay off any debts, and then split the rest between HYSA/Vanguard. If this happens again and your company lets you fund 401K with your bonus, opt in for it.
Edit to say: Congratulations, you earned this!
You’ve got a good head on your shoulders, so congrats. Fill up your emergency fund – you’ll sleep better at night. Max out a Roth IRA for both 2025 and 2026 – your future self will thank you. Take 10% for fun stuff – weekend trip, hobby supplies, kitchen gadget, the expensive ice cream from the grocery store, whatever.
If you have any other tax advantaged space you could fill – ie you could increase your 401k or HSA percentage and fill any shortfall in your budget with those bonus funds. If you don’t have access to a 401k or HSA, then yes a taxable brokerage with a low cost broad market index ETF would be a good choice.
That’s a wonderful story to share!
I would do exactly as you have planned, provided you have no debts. Fully fund your emergency fund, celebrate in some way, and invest the rest in equities.
Congrats on such a huge success!