How Should I Spend My $1,000 Bonus?

finance foundations, financial religion, savings
1000spending

A Client sent me a $1,000 bonus check. It came in with the rest of the mail: a poorly written query letter pitching THE HANGOVER meets HAROLD & KUMAR, a fully executed Option Agreement, and a FedEx bill. His assistant tucked the check into a plain white 8 1/2 x 11 with a single word scrawled on it (“Thanks!”), just as he promised. I can say, without an ounce of false modesty or humility, that he gave me this money for doing no more than my job required. I didn’t go above and beyond the call of duty. I did not put extra time into a special project. All I did was keep the trains running and cash$ flowing.

He’s given me a bonus check before (also for $1,000) but in that case, it was a reward for extra work. I tracked down a contact for our client, with nothing but an ordinary first name, an even more generic last name, and where she had dinner the night before. I found her on the interwebs and connected the two of them via electronic bits and bytes – an extraordinary feat considering the morsels of information he provided and the fact he doesn’t own a computer.

My question for today is:

What would you do with an extra $1,000?

Pure free money, like finding a yellow chip on the lush carpet of Caesar’s Palace, with no one there to make a claim. What would you do with it? Here’s my plan for the money, but I’m curious to see if I’ll be able to stick to it. When it’s all gone, I’ll write a follow-up post to see where it actually went:

My $1,000 Plan

This is where I plan to put the money:

$500 – Immediately goes towards savings
I don’t have a framework for how I decided to save 50% of the money. It just felt like, at this stage in my life — early in my career and many of my life’s big purchases still to come e.g., wedding, house, dog, etc. — I should save a large enough chunk so I feel conservative, yet spend enough so I can enjoy the free money. Half feels right — now I can spend the latter half on whatever I’d like, guilt-free.

Rather than putting any of the money towards long-term investing, they’ll go into my medium-term savings accounts: $300 towards a house down payment, and $200 towards a wedding.

$200 – To the second assistant
I can’t say this was an easy decision. In his words, when I showed him the check and told him I wanted to give him 20 percent: “No. I literally did nothing to earn this money. You shouldn’t give me a piece of it.” Here was my thinking: commissions are a major part of the representation business. When someone assists on a deal — whether it’s an intro, a phone call, or an email — offering a piece of the commission is how you reward the behavior. In this particular transaction with the client, the second assistant might have helped with 1% of the deal, and I covered 99% of it. However, in the lifetime of the relationship with the client, he’s helped with understanding past deals, how to work with him, and how to best manage his affairs.

Like I point out with all of Fighting Broke — the game is won in the long run. When making decisions, consider the long run. Building relationships is a lifetime investment, and offering a piece of the bonus check to show good faith towards maintaining that relationship is, I believe, well worth it.

$200 – Spend with the girlfriend
She’s talked about picking up a pair of shoes for a while now. I’d like to buy those for her, then spend another $100 on either a nice dinner or towards the hotel room in Santa Barbara when we take a trip in September.

$100 – Something for myself
I’ve also wanted a pair of shoes for a long time: this pair of Johnston and Murphy boots, in particular.

johnston

I planned to buy them literally six months ago and just never got around to doing it. With this free $100 I think I’ll manage to finally pick ‘em up.

How Would You Spend the Money?

There’s often a gap between what we say we’ll do with money, and how we actually spend it. This is a brief experiment to explore my own limitations and barriers when it comes to the synapse that exists between the two spaces. I’ll report back with exactly where the money went, but I’m curious, what would you do with a $1,000 bonus check?

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Photo Credit: Tax Credits

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