Using your bonus to reduce debt:

1. Paying up credit card debt - Credit card debt is the most troublesome debt of them all, by eliminating this bad debt, not only will you have extra money in your pocket, you will save money on hefty interest charges and compulsive shopping will be greatly reduced.
   
   
2. Eliminate small debts - If you have small cash loans and store accounts with low outstanding balances, you can eliminate them using your bonus, this will motivate you to further reduce debt as you will see instant results next time when you create a budget.
   
   
3. Deposit into your bond account - For those who have home loans, it can be a best way to deposit your bonus as a lump sum and save money in interest over a long-term, the good thing about this is that if you have AccessBond, you can access that extra money you deposited, so you save money in interest and have a rainy day fund.
   
   
4. Save a portion for the rainy day - If, however you don't have a home loan, you can save a portion of your bonus in an easy-to-access savings account.
   
   
5. Pre-pay all January expenses - You can arrange with your creditors to prepay all your January expenses in December, this will help you not to change channels when a back-to-school advert is shown on your favourite TV channel early January.
   
   
6. Buy that piece of furniture for cash - You can also use your bonus to buy that expensive piece of furniture, when you buy furniture for cash, you can negotiate for a price reduction and you save loads of cash in interest charges and unnecessary insurances, in most cases when you buy furniture e.g TV for R2000, you will end up paying around R4000 after a 24 months term, not to mention the disrespectful calls you receive from furniture store debt collectors when you skip instalments .
   
   
7. Spoil your loved ones - When you are satisfied with your debt reduction efforts, use some of the money to spoil your loved ones with special inexpensive gifts.
   
   

What's your best way to use your bonus to reduce debt?, share it with us, and help others who are still undecided on how best to use their bonus to reduce debt.