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4 Smart Ways To Spend Your Bonus

Monday, December 03, 2018

Amar Pandit, Founder & Chief Happiness Officer,

Saving for your future requirements and life goals is of great significance, but all the hard work you put in through the year to earn the bonus deserves some indulgence as well. Set aside 10-20% of your bonus for your self – buy that beautiful saree for your mother, the expensive toy your child has been eyeing or some new clothes for yourself for all those family get-togethers! Or you could take a weekend stay-cation in the nearest 5-star hotel or buy the latest phone you’ve been tracking the price of – after all you deserve to enjoy the bonus!

Once you have set aside some money for yourself, it is time to be a smart investor and utilise your bonus in such a way that coming year 2019 is filled with Happyness, Health and Wealth.

Pay off existing dues
Nowadays you can purchase anything with an EMI facility – be it a car, a house or a mobile phone. While these EMIs seem very achievable, most people tend to oversee the rising interest rates and the impact on EMIs. Prepaying or paying off outstanding loans when you receive your bonus can be very helpful to reduce your interest burden. Not only will this help you save more money in the long run but will also help increase your CIBIL Score. While prepaying a loan may involve a small charge, letting the interest build over the years will cost you more. To make the most of prepaying a loan, you should keep the EMI same but reduce the tenure of your loan.

Ensure you and your family are adequately insured
With increasing medical expenses and stressful lifestyles, it has become important to insure health adequately. You can use your bonus to buy a new health cover or get yourself adequately insured and ensure your loved ones are healthy and happy for years to come.

You can also utilise your bonus to buy a Term Plan or ensure you are adequately insured. A Term Plan is ideal as it serves the purpose of life insurance – ensuring your family is taken care of in your absence. After all financial security is the best gift you can give to your loved ones on this festive occasion.

Invest towards long-term goals
Instead of splurging on fancy gifts, endless shopping sprees or boxes of firecrackers, why not gift your loved ones and yourself a priceless gift – a happier future? A health corpus for your parents, a good education for your children or a peaceful retirement for yourself – these important life goals lose out to day-to-day expenses and short-term goals. Your bonus is the perfect opportunity to start investing or increase your savings towards these goals. With the markets being at a low, this is the perfect time to make investments. Since these goals are long term goals, you can invest in Equity Mutual Funds that will help your money grow and ensure you achieve your goals. You can either increase (top-up) your existing Mutual Fund investments or you can make a fresh lump sum investment.

Invest in Tax-Saving Instruments
Instead of scrambling to invest in tax-saving instruments in February and March, invest your bonus in an Equity Linked Savings Scheme (ELSS). Investing in ELSS not only helps you save tax but also helps you build your wealth. You will thank yourself when you are not running behind your Chartered Accountant or HR team in office to ensure you ‘save tax’ at the end of the financial year – a prosperous New Year indeed!

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