5 ways to smartly utilise your bonus money
Deciding where to invest your bonus money can be overwhelming and if you are dicey about how to utilise it effectively. Check the 5 ways mentioned below to invest your money in better hands.
A job often marks the probability of increments, appraisals, and bonuses but it could turn into a blessing in disguise if you spend it impulsively without any further planning. Thus, it is important to choose smart plans to utilise your bonus money as a backbone to improve your financial condition in the long run.
Here we will explore 5 sensible ways to smartly utilise your bonus money
Save for down payment
If you are planning to buy a house in the future, you can utilise the bonus amount to pay the down payment. This way it won’t be an extra burden for you. You must know that paying a large down payment can reduce EMIs and also interest rates. The larger the down payment, the lower your interest amount may be.
Pay off high interest debts
High interest debts are built quickly and can become more difficult to manage in the long run if they go unpaid. Again, in this context, the lump sum bonus amount can be used to pay off high interest debts like credit card debts, personal loans, or prepay any other outstanding loans.
Invest in career enhancement
Investing in a career is a brighter way to achieve your goals. The amount one receives from the bonus money can be utilised to take an online course, attend workshops, or learn new skills. This way you will be encouraged to continuously learn and develop while enhancing both your professional and personal skill sets.
Build an Emergency Fund
A penny saved is a penny earned. One must keep aside some money in case of unplanned expenses. With the rising expenditure, it becomes tough to save. In that case, the lump sum bonus can act as a boon if you plan to use it as an emergency fund. A contingency corpus is an integral part of every individual’s financial plan as it can provide a safety net in case of unexpected expenses or job loss.
Invest in a retirement account
Saving money for retirement can help you build financial security and stability for your future. Thus, investing in a retirement account, such as the National Pension System (NPS) or Public Provident Fund (PPF), can help one secure their financial future. One can opt for PPF investments for a fixed income part of the portfolio and invest in NPS for market-linked returns.