(NC)More and more companies are incorporating a bonus structure into compensation programs. Bonuses are often based on performance and are taxation advantageous for companies.

If youre one of the fortunate ones who will receive a bonus this year, what will you do with it?

"The key to using your bonus smartly is to find the right balance for you," says Linda Put, a CIBC Imperial Service financial adviser based in Surrey, B.C. "Because everyones situation is different, water cooler advice will not help you to maximize your financial potential."

In creating important financial decisions, the most powerful acquired skill you might have is to understand where you are and where you want to be financially. "Having a financial plan, whether formal or informal, can help you prioritize your overall goals and allow you to see more clearly how your bonus fits into that picture," says Put. "Seek the advice of a professional who understands the whole photo , not just investments." To help you understand how to build the most of your bonus, Put offers the following considerations:

Get professional advice: Every human is unique, with different financial situations, comfort levels and timelines. A financial adviser may help you understand your financial situation and work with you to help you achieve your goals. For example, you might choose to make use of your bonus to pay down debt, to contribute to your RRSP, or a combination of the two.

Look at the whole picture: Its important to look at your current financial picture the money you owe today and the funds you want to put away for your future. If paying off a debt, like your mortgage, will prevent you from capitalizing on an investment opportunity, you absolutely need to determine which will pay you the most in the end. Again, its important to work with a qualified financial adviser who will look at your distinctive situation and plan accordingly.

Pay yourself first: If you get RRSP loans every year, why not make use of this bonus to invest in your future and break the loan cycle? Then set up a pre-authorized payment plan so you might invest in your RRSP monthly and avoid the cash scramble in February. When the bonus comes in, youll have the financial freedom to build the financial choice thats right for you.

Go on, treat yourself: The best part about advance planning and factoring your bonus into your overall financial plan, says Put, is the opportunity you will have to treat yourself with some of the funds. With the help of your financial adviser and your financial plan, you will stay in control of your financial affairs and may look forward to reaping the rewards of the plan, and your bonus. So go ahead and treat yourself to something special. After all, youve earned it!

This article is intended to provide general information and should not be construed as targeted advice. This article is not applicable in Quebec.

- News Canada