Thursday, 17 October 2019

Smart Ways to use Diwali Bonus, How to use Diwali Bonus

Smart Ways to use Diwali Bonus, How to use Diwali Bonus

Smart Ways to use Diwali Bonus | How to use Diwali Bonus?

It is the time for Diwali, the festival of lights. The festival of Diwali is a joyous moment for employees as they receive Diwali bonus from their organization. With Diwali bonus money in hand, everyone is a little lost about where to use or spend this extra amount. Spending all the money of your Diwali bonus on unnecessary purchasing is not a good idea. This Diwali use your Diwali bonus amount to fulfill your goals which you have set for yourself this year. If you have not planned till now then here are some  ideas where you can use your Diwali bonus amount judiciously.

Ways to use Diwali Bonus

Pay Off Your Loans

If you have some high-cost debt such as credit cards or personal loans then pay off these loans first. If cannot pay them in full, at least make sure you pay part payment of these loans. By paying these types of loans you are reducing your financial burden. So make sure when you receive your Diwali bonus, it should be your first priority to pay off your high-cost debt.

Create an Emergency Fund

It is always advisable to have at least 6 months expenses set aside for any emergency needs. Often people are not able to create an emergency fund from their regular salary due to some other commitments like EMIs, insurance premiums, SIPs etc. Diwali bonus can be a good source for creating an emergency fund if you have not created it till now.

Buy Insurance

Life is unpredictable and nobody knows what will happen with him/her in the next moment of time. Therefore, it is always advisable to buy life insurance in advance. Life insurance ensures that your family will get financial support when you are no longer around to care for them. If you have not taken the insurance like health insurance and life insurance. Then with this Diwali bonus, you can buy an insurance plan with yearly mode payable at the time of Diwali. This will be the best gift for your family.

Plan for Tax Saving

In the last month of the financial year, mostly all of the employees will have to submit proof of tax saving to their HR department/employer. You can invest this Diwali bonus money in some tax saving instruments which are eligible under 80C of income tax act. This will save you from making wrong decision for tax saving options in the last moment. Investments of Rs. 1.5 lakh is allowed to be exempt from taxable income under section 80C of income tax act.

Long-Term Investment

You can use your Diwali bonus to plan your long-term investment if you have not planned till now due to some other commitments. You can allocate bonus money to your long-term goals such as the purchase of a house, children higher education, and retirement. Long-term investments help in accumulation of the required corpus.

Use it as Down Payments

Most of the employees have a wish list always ready before Diwali. If for a long time you were also wishing that you could buy a car, a home or some expensive jewelry. Then go ahead and use this Diwali bonus as down payments for these purchases. Buying a house or gold are always good investment options.

Diwali Shopping

There is nothing wrong in shopping for self and for family members. It could be shopping for jewelry, purchasing a consumer durable like a new refrigerator, TV, washing machine etc or even shopping for clothes. But always differentiate between your wants and needs before you go out for shopping. Make sure you spend your Diwali bonus amount only on essential gifts or purchase items which you need the most.

Hope the above article will help you to use your Diwali bonus judiciously.

Note: This post was originally published in November 2015 and has been completely updated for accuracy and comprehensiveness.

Also read: SBI PPF Account - How to open PPF account in SBI?

You may also like to read: NSC (National Saving Certificate)
You may also like to read: Small Saving Schemes

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Smart Ways to use Diwali Bonus, How to use Diwali Bonus

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