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The smart move is to split it: put most of it toward whatever's draining money from your life (debt, emergency fund, or something you've been putting off), then use a smaller chunk for something that actually makes you happy so it doesn't feel like punishment. Resisting the urge to blow it all at once is the hardest part, but you'll thank yourself later when you're not stressed about finances.
People always talk about splitting it perfectly, but honestly the real trick is figuring out what's actually bleeding you dry right now - sometimes that's debt, sometimes it's the fact that your truck's running on borrowed time and you know it's gonna cost a fortune to replace. I got a bonus earlier this year and immediately threw half at fixing equipment issues I'd been dreading, then used the rest to actually breathe for a month instead of stressing paycheck to paycheck, and that mental relief made a bigger difference than I expected it would!
The thing that actually works is treating it like it doesn't exist for a month - stick it in a separate account and just let it sit while you go about your normal life. After 30 days you'll have a way clearer picture of what you actually need versus what sounds nice in the moment. Once you know whether it's plugging a real hole (medical bill, car repair, that emergency fund that's basically zero) or just tempting you with wants, the decision practically makes itself. The money's still there either way, but you're not riding the dopamine wave when you make the call.
Before you touch it, write down what would genuinely hurt if it disappeared tomorrow - that's where the money goes first. I got a bonus last year and spent a week thinking about it, then realized my car's brakes were shot and I'd been limping along with a dying laptop; that windfall fixed both, and I slept better than any vacation purchase would've made me.
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