After standing on the podium basking in the glory from winning the Super Bowl, each player from the winning team will likely receive a bonus check of around $180,000. I don’t know about you, but I wouldn’t mind receiving that kind of money as a bonus for playing a sport that I enjoy! For those of you counting, that’s over three times what the USA median household income was for 2012! Quite astonishing! For something a little more light on this Saturday morning, I thought I’d share how I would spend the money.
- Pay the Tax Man – We are quickly approaching the time of year to pay Uncle Sam! I’ve witnessed many people receive large windfalls of money who forget to set aside funds to cover the taxes that will be owed. The first thing I would do is set aside a reasonable portion in a savings account to pay federal and state income taxes. Let’s use some round numbers and say this cuts our figure down to $120,000 (1/3 just to keep Uncle Sam happy!).
- Give Generously – We have some family friends who are really struggling financially. I would earmark equal amounts to give to our church, to these families, and to missions. Say goodbye to another $45,000! ($75,000 left!)
- Purchase a Minivan - There was a time in my life when I never thought I would drive a minivan. But after having a child, I find myself enjoying the thought of driving that grocery-getter all over town! We really like the Honda Odyssey and would look to purchase a one owner, low mile version on Craigslist. After paying all the taxes and licenses to get it road ready, we’re down another $15,000. ($60,000 left!)
- Pay Off Remaining Student Loans – As mentioned in our 2013 Goals, we have about $33,000 left in student loans. These checks would be written as quickly as possible! ($27,000 left!)
- Open a 529 Plan for Junior – Saving for Junior’s college isn’t something that keeps me up at night. I’m more concerned with molding his character, work ethic, and job skills than sending him to college. But because we would have some extra money, I think this would be a good use of it. Plus we would receive a tax credit from the state! ($5,000 starter fund, so we’re down to $22,000).
- After Tax Season Vacation – This might seem kind of frivolous, but our family could use some relaxation after the crazy hours of tax season. My wife would love to go visit the pacific northwest, so I’d let her plan the trip! We wouldn’t go crazy with our spending. I think we could have a great time on $2,000. ($20,000 left!)
- Fully Fund ROTH IRAs for 2013 – Use Vanguard to open a ROTH IRA for my wife and I. Would probably choose one of their cheap target date funds as we don’t have a lot of retirement assets and don’t need to labor over asset allocation at this point in our financial journey. Down another $11,000 to $9,000!
- Refinance our House – As I mentioned in our 2013 Goals, i want to refinance the mortgage to a 10 year note. Yes, I understand I might be able to get better returns by keeping a 30 year mortgage and investing the difference. I’m just not wired that way. Being free from monthly payments is much more appealing than using leverage to try to outpace the mortgage expense with returns! $9,000 less $9,000 is zero!
That would be my plan! Was there anything I left out? How would you spend a $180,000 Super Bowl bonus check?