The end of the year is almost upon us - and good riddance, we may add.

While 2020 has been full of challenges and setbacks, it’s always good to take some time and appreciate what good this year has brought, all things considered.

For many people, the end of the year also brings a little added positivity in the form of a holiday bonus.

Since choices are aplenty, you may need some time to carefully consider them, from going on a bit of a splurge, using this opportunity in your way to getting rid of debt or finally taking that first step to start investing.

Let’s take a look at them:

Spending it

This can be very tempting.

You’ve worked hard, you managed to take all measures to safeguard yourself from COVID (sanitary or otherwise) - you may feel you deserve to get a bit indulgent on Christmas gifts for you and the ones you love. After all, the average consumer in select European countries spent around €460 in 2019 during this season.

You are the only one that knows whether this is sustainable given your own financial situation, but even if it is, in the long term you are sacrificing future purchasing power.

One way you can go about it is to divide that windfall between present temptation and future obligation.

Which is to say, spend part of it, and use the other towards your future financial goals. The exact percentage will come down to you, but as a matter of principle, try limiting your bonus spending to 50% max - assuming that this falls within your possibilities, of course.

For the remainder of it, or if your spending is already accounted for, there are other routes:

Taking a hit on debt

Debt is one of those things that tends to creep up on the unprepared.

A little bit here and there and before you know it your income is being chipped away by interest and it seems it never goes away. This is a reality for many people, as European banks held €786 billion in non-performing loans as of June 2019, a third of which is made up by consumer loans.

In a sense, debt can be thought of like the reverse of investing: small steps add up until compound interest starts working against you, and not for you.

So if you are in a situation where you are trying to get rid of debt, this is a prime opportunity to take in your way towards financial freedom.

Identify the best source of debt for you to tackle and keep going.

Saving it

This could feel like a strange thing to suggest. After all, we are all about investing and making your money work for you.

However, it should be noted that saving and investing are not in direct competition with one another. After all, before you start investing, you need to save first.

And in light of recent events, it may be a good idea to reinforce your emergency fund. This way, you can avoid being sidetracked by an unforeseen event. Chances are one is going to occur sooner or later.

Your savings are an important part of your financial mix, so don’t neglect it as you move forward. As you increase in worth and gains, make sure your savings are adjusted.

Many people have taken this path, as the savings rate recently took a record high at 24.6% in the euro area.

Investing it

You already knew this was coming, of course, so we won’t take too much of your time.

After all, you already know that investing is a great way to increase your potential gains, and to make a better life for you in the future.

No matter where you stand, there are countless options for both timeframes and amount to invest.

Compound interest can be a powerful ally in your financial future. So even if 2020 may not have been the best of years, you can start now so that the following ones will be better.

Give your friends the bonus of knowledge, share this article with them.