Whether it’s tied to performance, holiday profits or a tax refund, nothing beats the joy of receiving a bonus. But resist the temptation to blow it all on something that could be short-lived. Instead, consider the following, all of which can have a lasting impact.

  • Pay down debt. If you’re carrying a credit card balance or another high-interest, short-term debt, here’s a chance to reduce it. With average credit card debt at nearly $8,000 per household, even a modest holiday bonus can make a serious dent and minimize the snowball effect.
  • Refresh your emergency fund. Are you one of the 63 percent of Americans who doesn’t have the savings to cover an unexpected $500 expense? Consider building a cash cushion that will help prevent you from reaching for your credit card at the next emergency.
  • Superfund your retirement savings. Take this opportunity to max out your IRA or 401(k). Using a bonus to put more long-term money into tax-advantaged accounts lets you avoid the end-of-year funding rush.
  • Leap ahead a few payments. Overpaying your usual mortgage amount means you’re shaving down the principal faster, which results in less interest. You can do the same with student loans and other long-term payments, just make sure there isn’t a prepayment penalty.
  • Don’t just treat yourself; invest in yourself. Reserve 10 to 20 percent of your bonus for a home, health or education upgrade. Spending in areas that are likely to generate more money in the future is a smart way to rationalize a purchase since you’re putting the unexpected funds to good use.

Consider dividing your bonus among multiple categories, giving higher percentages to your more urgent priorities. Using this strategy for a lump-sum windfall can turbocharge your existing short-term and long-term financial goals while still giving you a little breathing room to enjoy your reward.

With higher education costs escalating faster than traditional inflation, it’s important to treat the college selection process as the serious investment it is. Whether you, your child, grandchild or other loved one is researching colleges and universities, calculating the actual value of higher education can help whittle down the options and justify the escalating costs. Here are three interesting metrics to consider:

  1. Total Debt at Graduation — Earning an undergraduate degree is a crucial milestone, but starting a new life chapter saddled with tremendous debt can disrupt that momentum. States and institutions can take different approaches to student loans, so pay attention to the student debt trends at each university or college to set realistic expectations.
  2. Alumni Earnings Above Expectations — While U.S. News & World Report provides a popular college ranking list each year, the minds behind The Economist created their version with a unique, finance-oriented premise. The magazine’s first-ever ranking of four-year, nonvocational colleges is based on how much money graduates earn compared to how much they could have made had they studied elsewhere.
  3. Highest 4-Year Graduation Rates — While overall graduation rates matter, the ideal situation is earning the degree in as little time as possible since college costs can skyrocket as more semesters are added. Looking at graduation rates for those who completed college in four years can help prospective students find campuses with similar work ethics.

College is a booming business, and it’s critical to consider the financial impact from a variety of angles, especially if your goal is to help yourself or someone else on the path to lasting success


The information provided in Eddleman’s Economic Insight is not intended to be used as investment advice; rather it is provided as general economic news and information for your awareness or for discussions with your investment professional. Please consult your investment professional or CPA for advice specific to your situation! Past performance is not indicative of future results.

Eddleman - WBBJ

Here’s a story I was interviewed for on WBBJ about Brexit. Obviously I had much more to say that had to be cut from the piece. Don’t forget, I actually had a brief blogpost weeks ago where I mention Brexit and what else is on the horizon. Expect more details soon in our Eddleman’s Economic Insight blog.

Group Of Business People With Their Mouths Taped Shut

Eddleman and Eddleman LLC has chosen to be a fiduciary for more than a decade. And while we believe that a fiduciary implementation is the best for clients, we also believe that individuals should have the option to choose how they implement financial services. But, there’s been a battle raging over this same decade of who is a fiduciary, who isn’t and who should be. Some of our peers are also fiduciaries; they believe that everyone in the investment industry should come under the fiduciary rule. However, there are alternative ramifications when the government gets involved and starts forcing businesses and individuals to interact in certain ways.

So what is a fiduciary? On a basic level, a fiduciary is an entity that manages the affairs of another with the highest level of care. When it comes to investing, a fiduciary has a legal responsibility to do what is in the best interest of the client. Currently, all investment advisors are required by the Investment Advisors Act of 1940 to be a fiduciary to their clients, while stockbrokers are regulated by the Securities and Exchange Act of 1934, which does not require a fiduciary duty to their clients. Stockbrokers are required to make “suitable” investment suggestions for their clients, but they are not required to make the best suggestions for their clients. For more information on the differences between stockbrokers and investment advisors, read this article from Forbes.

Currently, the Labor Department has proposed a bill that would raise the investment advise standards for stockbrokers. The bill would require stockbrokers and potentially others in the industry to be fiduciaries. Not only would this bill change the way that stockbrokers give advice, but the wording of the bill could also cause a censorship of the media. Media personalities who give advice to individual callers or audience members might no longer be able to express their opinions on specific investment situations. This raises questions about whether or not the bill violates First Amendment rights. This article from Forbes gives a more in depth look at how this bill could cause problems for media members.