Finance expert of St Petersburg University reveals the best way to use the New Year job bonuses

Inability to manage finances often leads to the situation when a considerable bonus received on the New Year is spent on impulse buys. Tatiana Kotsofana, an expert at the Centre for Financial Literacy of the University, says that the solution to this problem lies in spending planning, the use of savings accounts, and a cautious attitude towards discounts and sales in stores and shops.

‘To “spend wisely” you need to learn an immutable rule: a fixed percentage of any income is to be deposited into a separate savings account. At the same time, unplanned and unforeseen income can be fully transferred into savings or investments. Another important rule is to create a plan of expenses and, if possible, to follow it,’ continues Tatiana Kotsofana.

An immutable rule: a fixed percentage of any income is to be deposited into a separate savings account.

Tatiana Kotsofana, an expert of the Centre for Financial Literacy of St Petersburg University

According to Ms Kotsofana’s opinion, steps that will help to save money are the opening of savings deposits, the monitoring of spending with the help of special applications, the distribution of money in different envelopes depending on the goals, and even a piggy bank familiar to everyone since childhood.

‘Often the idea of finance optimisation is associated with saving. However, saving is understood in a very peculiar way. For example, a person uses an old computer at work, experiences obvious inconveniences because of it, but does not buy a new one because it is expensive. On the other hand, every day they buy a bunch of snacks, chocolates, yoghurts, and many other little things that they don't need. Discounts and promotions often trigger behaviour which can be described with the words “it's nonsense, but look how cheap it is, so I'm going to buy it”,’ warns Tatiana Kotsofana. ‘At the same time, such a person does not think that a computer for 50,000 roubles will serve them more than one year, and 100 roubles spent several times a day on nonsense will amount to a large sum for a year or even a month.’