Most schools offer discounts of up to 10% if you pay the fees in full at the beginning of the year. This also gives you the opportunity to start saving for the following year’s school fees. For example, if you pay 2017 school fees upfront, then you save on the monthly payments for the year. If these are invested in a high-interest account over the year, then you would be able to pay 2018’s school fees upfront without using next year’s bonus.
Pay less tax:
You can invest 27.5% of your bonus tax free into a retirement annuity or top up your company retirement fund. This will boost your retirement savings by saving on tax.
Pay less for your short-term insurance:
Often, short-term insurers are prepared to give up to 15% discount on premiums if you pay them as a lump sum at the beginning of the year. Make sure you use the monthly saving to either pay off your debt faster or invest more.
The example below demonstrates the value of a recurring investment into a retirement annuity after 10 years Fund value (including tax benefit) The example below demonstrates the value of a recurring investment into a Tax Free Plan after 10 years