5 Smart Ways To Spend Your Bonus This Year!
Receiving a bonus is a windfall gain that everyone looks forward to. But, it is important to know the five most effective ways of spending your bonus so that you can make the most of it.
An annual bonus or a bonus linked to festivals such as Diwali usually ranges from 5% to 10%. Apart from a monthly salary, it is the most significant yearly payout. This is why it is all the more important that you use it wisely. Instead of spending it all, balance spending for enjoyment with using your bonus to improve your financial situation. In fact, if you can plan ahead of time, you’ll find that you can use your bonus even more efficiently.
Here are 5 smart ways on which you can spend your bonus:
Use it to pay debts:
Owing money is never a pleasant situation. Whether it is a home loan or a student debt that you have carried forward, the sooner you can clear the financial obligation, the better it is. After all, high levels of debt lower your credit score and affect your creditworthiness. Using a bonus to clear your debts eradicates the worry of repayment and reduces future EMIs, if any. It also frees you from the financial risk associated with defaulting on such financial obligations.
Save a portion for emergencies:
What makes certain situations, such as an accident, so scary is that you have no control over it. While you can’t always control the emergency, what you can do is create a contingency fund for it. You can stay financially protected by saving a sum of your bonus that will help you tide through tough times. In case of an emergency, you are likely to encounter expenses that need immediate payment. For example, legal bills or medical bills are costs that can’t be put off. In such instances, your bonus will come to your aid.
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Invest it correctly:
It might seem unfair to invest your bonus instead of enjoying it, but think of it in different terms. When you invest your bonus, you aren’t losing out on it. You’re only multiplying it for the future. There are numerous options that you can consider when it comes to investing your bonus. These options include FD (Fixed Deposits) , mutual funds, stocks, post office deposits and more. Once your investment reaches maturity, you can use it for a range of purposes.
Use it to acquire skills and specialisation
Acquiring skills and specialisation in your field is good for your financial health. It adds value to your candidature and makes you an excellent hire. As a result, your earning capacity increases. If gaining specialisation requires you to study further, you can use your bonus to meet these expenses.
Enjoy the fruits of your labour:
Balance is key, even when it comes to your bonus. While it is important to invest it and use it to achieve your financial goals, you must also use it for leisure or to fulfil personal goals and desires. Be it travelling, buying new furniture or upgrading your smartphone, spend your bonus wisely and you’ll gain emotional and financial benefits.
So before you are tempted to spend your bonus without thinking, try dividing the sum across these five categories. You’ll be able to cater to your wishes, while ensuring that you’re making financially wise decisions as well. Use our FD Calculator to calculate your maturity amount.