16 Ways To Invest Your Bonus and Build Wealth Beyond Your Salary

Transform your bonus into lasting wealth with these smart investment strategies.
Updated May 8, 2024
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A windfall such as an end-of-the-year bonus or a large tax return can be an excuse to spend more money, or you can use it as a springboard to build wealth and financial stability.

Here are a few ways to make the most of your bonus and use it to generate income outside your regular paycheck.

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Pay off credit card debt

C.M./peopleimages.com/Adobe man reading financial documents

While it might be painful to send your bonus to your credit card company, the return you get via savings on interest and peace of mind knowing you have less debt to deal with is well worth it.

Working to eliminate high-interest debt makes more money available each month for other wants and needs. 

Get your 401(k) company match

fizkes/Adobe businessman doing paperwork

If you have a company that matches 401(k) contributions, this one is a no-brainer. When you put enough money into your retirement account to get matching company dollars, you get a 100% return on your investment.

It’s not as sexy as starting your own business or buying real estate, but your company 401(k) match may be the best return on investment you can get on your bonus.

Contribute to an IRA

Vitalii Vodolazskyi/Adobe Documents about Individual retirement account IRA on a desk with an opened pen,calculator and a notebook.

If a 401(k) match isn’t an option, you can contribute to an IRA without going through your employer. 

If your income qualifies you for a Roth IRA, your money grows tax-free until you withdraw it during retirement. That won’t put money in your wallet this year, but it could represent decades of tax savings.

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Open an HSA

Tijana/Adobe smiling couple managing finances

If your insurance plan is compatible with a health savings account (HSA), you can reduce your taxable income by the amount you save for future medical needs. 

You may also be able to invest your HSA contributions, and like a Roth IRA, they grow tax-free.

Start a side hustle

gstockstudio/Adobe woman having web conference

Many savvy folks use a windfall to start a side hustle or a small business. This investment can be a huge benefit, earning you cash outside of your 9-to-5 job. 

If you’re considering monetizing a hobby or dipping your toe into a different industry to make extra money, a side business is a smart way to do so.

Hire a financial advisor

kerkezz/Adobe a female financial advisor with short curly hair is consulting a client with joy in her office setting.

Sometimes, good advice is worth paying for. If you have a complex financial situation, using your bonus to pay a fiduciary financial advisor could be a savvy move. 

These professionals can see the big financial picture and help you plan your investments, savings, taxes, and other factors in your life to best position you for the future.

Invest in your education

PintoArt/Adobe adult people in a class

Often, the best investment is in yourself. If you can use a bonus to pursue a degree, certificate, or course to up your skillset and marketability, the return on investment is your increased ability to earn income over your working years.

Beef up your emergency fund

Rido/Adobe woman reading bills at home

If the last few years have taught us anything, it’s that the economic winds are unpredictable. Prepare your finances for the inevitable rainy day by adding to (or starting) your emergency fund. 

An end-of-the-year bonus will get you quick traction on this goal without dedicating any of your regular paychecks to it.

Open a brokerage account

LIGHTFIELD STUDIOS/Adobe male advisor sitting at table in office talking to female in front of him

If your retirement savings is already well in hand, consider using your holiday windfall to open a brokerage account. Yes, you’ll probably have to pay taxes on the gains when you sell, but you can invest your money in whatever assets your account allows.

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Contribute to a 529 plan

fizkes/Adobe young businessman signing agreement with skilled lawyer in eyeglasses

If you want to put your bonus toward your child or other relative’s education, consider a tax-sheltered 529 plan — particularly if the child is young. Assets in these accounts can be invested and grow to compound your savings.

Buy back your time

Rido/Adobe woman sitting on deck chair at beach

If you’re time-poor, consider using your bonus to delegate low-impact tasks such as chores, errands, or yard work to free up more of your time. 

Unlike money, you can’t make more time with hustle and grit. Using your bonus this way can give you more time to relax or spend with those you care about.

Buy in bulk

Sarah Rypma/Adobe Grocery cart with toliet paper and some food items  with other grocery items in background at a Costco in Kalamazoo, Michigan

Getting a good deal on nonperishable items you use regularly can be worth shelling out for. Ironically, the more you spend on things like toilet paper and canned foods in bulk packaging, the cheaper per item. 

If you have the cash available, stocking up on necessities at Costco and other warehouse clubs can stretch your dollars further.

Save for the holidays

ivanko80/Adobe loving couple doing Christmas shopping together

It’s never too early to save for the next holiday season. By doing so, you can avoid the trap that a third of Americans fall into: going into debt for holiday purchases. 

Saving your bonus for next year’s gift-giving will allow you to enjoy the season without paying interest on it afterward.

Budget for a large purchase

dusanpetkovic1/Adobe couple enjoying shopping

When you know you'll need to buy a new car or water heater soon, squirrel away your windfall to make that purchase easier. 

This strategy isn't just for needs — if you're planning a big summer vacation this year, do yourself a favor and budget your bonus for that now.

Reward yourself for hard work

standret/Adobe brunette woman in the supermarket with shopping bags and phone in hands

It’s your bonus — you’ve earned it. And while paying off debt and buying beans in bulk are great financial strategies, it’s important to reward yourself for working hard. 

Positive reinforcement encourages you to keep up the behaviors that got you your bonus in the first place, so give yourself permission to get yourself a little something.

Open a high-yield savings account

Felix/peopleimages.com/Adobe accountant reading report

As a silver lining of the Federal Reserve’s rate hikes, the best high-yield savings accounts now offer interest rates of 5% or more. Saving your bonus is a better idea than ever, as you can earn a respectable amount of interest by socking it away.

Bottom line

Liubomir/Adobe successful arab businessman

Your bonus isn't just a reward for your hard work; it's a powerful tool to shape your financial future.

Identify your money's biggest pain point, whether it's credit card debt, retirement anxiety, or a nagging car, and use this windfall to transform it into a strength.

By strategically choosing how to invest your bonus, you can set yourself on a path towards lasting wealth and financial fitness, one mindful move at a time.

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Current Offer

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Annual Fee


Rewards Rate

Earn 2% cash rewards on purchases

Benefits and Drawbacks
Card Details

Author Details

Jenni Sisson Jenni Sisson is a freelance writer and editor who focuses on personal finance, real estate, and entrepreneurship. She has been published in Business Insider and The Ways to Wealth. In addition to writing, Jenni hosts the Mama's Money Map podcast to help fellow stay-at-home moms on their journey to financial freedom.

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