Getting a tax refund, a bonus or a big commission payout? Here are a few smart money moves if you’re coming into extra cash

It’s bonus and tax refund season! CHA CHING!

For a lot of people this year, windfall money — especially if it’s sizable — equals big-ticket spending … and fast. What if you took the opportunity to be financially strategic with this cash?

Here are easy guidelines to help make the most of it:

Put one-third into long-term savings (RRSP, TFSA or work pension)

This is the “good for your future self” part. By socking away a portion of your excess cash toward retirement, and then investing that money well for the long-term according to your risk tolerance, your nest egg will grow through the power of compounded interest and reinvested returns. The best part can be are tax advantages — in your RRSP you save taxes today and pay them in retirement, and in a TFSA your money grows tax free. So you can stretch this windfall money even further!

Invest one-third into your immediate future (a class, a service to save you time, or pay off a loan or credit card)

What’s going to help raise you up as a person, professionally or even financially? Spending in this area should have fairly immediate benefits for your well-being and bottom line.

Get strategic: ask yourself what you need to be your best self.

If your mental health is a priority, you may want to earmark this money for yoga, meditation classes, counselling services (keep your receipts for your benefits and potential tax savings), or a sleeping retreat — yes, these exist and they sound glorious!

If you want to improve your chances of getting the next step up in your career, perhaps spending on career coaching or a course that could teach you how to code websites better or improve your project management skills is what makes sense. And if you sign up for an accredited university or college course, you’ll even get a tax receipt for the tuition.

If time is scarce and you need some of it back, you might sign up for meal boxes, have your groceries delivered, hire someone to deep-clean your home or repair things around the house, or book extra babysitting or nanny care.

And if debt freedom would do wonders for your stress level, consider using this money to wipe out your most expensive pesky debt. PS: if you’re carrying a credit-card balance (the peskiest of them all), I highly recommend paying it off with this portion of money.

Spend the last third on yourself! Buy yourself a gift or go on a vacation — this is all about you enjoying your hard work.

Spending money to create happiness for yourself is OK! In fact, it can be beneficial for your finances. Yup, it turns out that happy people tend to be better prepared for retirement and have more money.

For this portion of money, you don’t need to be mega-strategic. It’s a reward for your hard work. Think about what will bring you joy. For me, I’ll use this money for a holiday with my family next month … and I’ll buy some new snorkeling gear, too. For you it could be new romance audiobooks or a bigger television. Do what feels great for you!

Yes, changing the portions a bit might make sense for you especially if you have fairly specific goals like catching up with retirement savings, paying down your HELOC or finishing your master's degree. Still, do what you can to strike a balance between these categories in order to experience greater satisfaction in many areas of your life.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.