JOHANNESBURG - If you are in any doubt about what to do with your year-end bonus, Angela Saltas, a Certified Financial Planner and director at Corporate Retirement Services, has these tips:

• Pay off your debt. If you have any debt, particularly credit card or other short-term debt, you should pay it off. Find out which of your cards charges the highest interest and pay that off first.

• Stash away money for an emergency. People typically get into debt because they have not saved money to cope with unexpected expenses. The rule of thumb is to save about three months’ worth of income.

• Split your money into three categories: for capital debt, your investment/retirement portfolio, and fun stuff.

1. Capital debt includes financing for your major assets, such as vehicles and property. Usually, this has a lower interest rate than short-term debt. Do not reduce your monthly repayment. That way, future monthly payments cover a greater portion of the capital and a lesser portion for interest. Slowly but surely, you will decrease the term over which you are paying your debt and the amount that you pay in interest.

2. The second category is money for your future self. Speak to your financial planner about what investment vehicle to use for long-term savings. A tax-free savings account or retirement annuity fund will also save you on tax.

3. Money to spend on your current self. Why shouldn’t you spoil yourself? After all, you’ve worked hard to deserve that bonus. Just don’t be foolish.