I Asked ChatGPT What To Do With an Unexpected Holiday Bonus — Here’s What It Said

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An unexpected holiday bonus can be exciting, but how you choose to use it can make a real difference once the season ends.

Instead of deciding to spend it on an experience or the latest tech gadget, consider how it can be used to improve your finances. GOBankingRates asked ChatGPT what to do with an unexpected holiday bonus, and here’s what it said.

Pay Down High-Interest Debt

High-interest debt can wreak havoc on your finances, especially if you can afford to pay only minimum payments. Paying only the minimum can extend your repayment time by years, which means paying significantly more interest.

ChatGPT suggested putting your bonus toward the highest-interest debt first. It explained that even a small lump-sum payment can reduce compounding interest, which can help you pay off your debt faster. 

Build or Rebuild Your Emergency Fund

If you’ve dipped into your emergency fund this year or don’t have one, ChatGPT suggested building it up. It said that setting aside part of your bonus for emergencies gives you a buffer for unexpected expenses, such as medical bills, car repairs or short-term income gaps.

According to Vanguard, you should build an emergency fund over time equal to three to six months’ worth of expenses.

Cover Upcoming Expenses

Property taxes, insurance renewals and annual subscriptions often hit early in the year, according to ChatGPT. It recommended using your bonus to prepay or set aside money for these bills and ease pressure on your budget for January and February. 

Using your bonus in this way can also help prevent having to use a credit card if the extra expenses exceed your budget. 

Put It Toward Retirement

If your employer offers a 401(k), ChatGPT suggested increasing your next contribution or making a one-time deposit into your retirement account to help strengthen your long-term financial picture.

It added that even modest contributions grow over time.

Make a Planned Purchase Without Using Credit

If you already intended to buy something — like a needed appliance, new tires or work equipment — your bonus can help you do it without adding debt, according to ChatGPT. 

Instead of dipping into your emergency fund or using a credit card for something you need, using your bonus could be a better solution. 

Split It Between Enjoyment and Stability

One last option is a compromise: Spend some and save some.

The chatbot suggested setting a fixed amount to spend on something fun and saving the rest. It said that this approach can keep you from overspending while still letting you appreciate the bonus.

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