How to handle cashback bonuses?

[sizzlinkola]

I'm a CC churner and want to apply for a CC to get a $400 cashback bonus. I'm having a dilemma on how to treat this $400.

I'm planning to make a large purchase for a hobby of mine: crash pads for bouldering. At the same time, I want to maximize my Roth IRA or reduce my debt. Thus, I'm conflicted on the different options on how I could use this money:

• 2 pads for $310 (superior quality, long life). Invest leftover $90 into Roth.

• 1 $150 pad (average quality, short-medium life). Invest leftover $250 into Roth.

• Invest entire $400 into Roth. Buy either pad option with take-home pay.

If I didn't have the $400 bonus, I would feel bad about buying the $310 pads and may opt for the $150 pad instead (or 1 superior quality pad rather than 2). Thus, having the $400 bonus makes me feel less guilty to splurge.

My finances: Have a 6 mo EF. I maximize my 401(k), HSA and working on my Roth. I'm confident I'd be able to maximize my Roth without any cashback bonus. I have a student loan of $16k @ 3.4-3.8% and a auto loan $12k @ 2.2%.

How should I handle this?

[jacob]

You'll develop better financial habits if you always send windfalls into "savings".

Toys should be budgeted for.

Even better/more advanced, that budget-category should be self-funding, e.g. by selling other toys and using [only] that money to buy new toys.

[Gilberto de Piento]

I'm planning to make a large purchase for a hobby of mine: crash pads for bouldering.

Try looking on craigslist, at the gym, and on mountainproject for good deals. Apparently they can get used up though, so watch out for that.

[Seppia]

question: why would the source of money have an impact on its use?

$400 are $400, whether you got them from work, dividends, found them in a ditch, or got them as cash back.
I would ask myself the question "should I spend $400 on XYZ?" with no regard of its provenance.