By Scott Nordlund
The new tax law signed by President Donald Trump permanently slashed the tax rate for companies, and many are passing some of the savings on to their workers. Walmart, AT&T, Southwest Airlines and other big employers are paying out $1,000 bonuses.
If you're getting one of these windfalls, what should you do with it? We have PLENTY of ideas, from the practical to the outlandish.
Check out these 20 best ways to use a $1,000 bonus.
1. Save, save, save it
Putting your $1,000 into a high-yield savings account or CD (certificate of deposit) will allow you to accrue interest on the money and make it the start of something wonderful.
Save for your future, or for something more immediate, like a new car or that cruise you've been dreaming about.
2. Get rid of some credit card debt
Carrying a balance on a credit card is expensive! The average interest is more than 16%, meaning a $1,000 balance costs upwards of $160 per year. So take your bonus and pay that off.
If your card debt exceeds $1,000, open a 0% credit card to give yourself a break from interest charges on the remaining balance.
3. Start an emergency fund — just in case
So, you know you ought to have an emergency fund but have been putting it off and putting it off? Well, now you have the money to just get started already!
You need at least enough money set aside to cover six months' worth of expenses, in case of a layoff or other financial emergency. About a quarter of Americans have no financial cushion. It's time for you to leave that crowd behind.
4. Ditch some student debt
If you're like most college graduates, you've had student loans looming over you for years. Put your $1,000 bonus to good use and drop your student debt by another grand.
You'll cut your student loan payments, and — most importantly — that big number on your remaining school debt will be just a little bit smaller.
5. Open a retirement account
Retirement may seem like it's 100 years away, but if you are 35, you might be more than halfway to retirement — and that's a little crazy.
A $1,000 payment to open an IRA (individual retirement account) may not seem like much, but it's a way to start building a nest egg. Help it grow by setting up regular automatic contributions, either from your paycheck or your bank account.
6. Get bullish for stocks
Have you seen the stock market lately? The Dow Jones industrial average shot up more than 25% in 2017. Take your $1,000 and get into the action!
Consider mutual funds, which are baskets of investments that spread your risk and are better than betting everything on just one stock. Do some research to grow your initial investment into something bigger.
7. Save for your kids' college
If you already have kids or are expecting, use your bonus to open a 529 plan. These college savings plans have tax advantages and allow a family to get a head start on college funding.
Consider this: Higher education is very expensive now, averaging almost $35,000 a year at four-year private institutions. Can you even think how expensive it will be in 20 years?
8. Invest in cryptocurrencies
Sure, the price of bitcoin has gotten high and wild. But $1,000 can buy you a nice investment in some of the other leading digitical currencies, or maybe even a brand-new one through an initial coin offering (ICO).
There are plenty of possibilities, but remember: Never invest more than you are willing to lose.
9. Get that medical or dental work done
Health insurance goes only so far. A $1,000 bonus could help pay for that out-of-pocket medical or dental expense you've been putting off.
Using the money to take care of the knee surgery you've been needing or the braces you've been wanting for your teeth can help you feel healthier and happier.
10. Donate the money to charity
Giving your $1,000 to charity could go a long way for those in need.
Make sure you donate to a charity that is registered, and you might be able to get a tax deduction if you itemize. (But note that the new tax law also makes itemizing less attractive.)
