Suddenly these days you will find that newspaper width has doubled with “sale” & “new launch offers”. The FM radio breaks have gone big with advertisements hammering the offers numerous times in your head. The reason is that you are a conduit between market & money.
And, marketers know your festival bonus is about to arrive.
If you have worked hard, and other parameters are favorable, there is a good chance that this year you will receive a good bonus on upcoming festivals – as the bonus depends on the company’s performance. This year was better for corporate India. “So, it is time you start planning wisely for this windfall income. Money is not good or bad but the usage makes the difference – I think this applies to most of these things in the world like nuclear power or weapons,” says Madhupam Krishna, Securities and Exchange Board of India (Sebi) registered investment advisor (RIA) and chief planner, WealthWisher Financial Planner and Advisors.
You Should Use Your Bonus For Meeting Your Wants
One always looks for a bonus to plan a gadget, replace the car, or plan a vacation. Bonus does not mean not enjoying life. If these things are essential and you have planned for them, you must use bonus money to make yourself, and your family happy and create memories.
But It Pays To Be Careful
“But, stay within budget. Your vacation should not depend on the size of the bonus. For example, if I get X bonus, my family will go to Manali and if I get Y bonus we will go to Hong Kong. This is the wrong way to use bonus – you should fix your budget before even looking at bonus figures,” says Krishna.
Bonus is not your down payment to increase your EMIs, which you still struggle to meet. So adding big assets like a car or house means more EMIs.
Check Your Financial Health
“Bonus is also an event when you should re-check your financial planning essentials,” says Krishna.
For example– is your emergency corpus at an optimum level? Is your term insurance & family mediclaim adequate? Have you done tax planning for the year? Have you cleared credit card debts and loans charging high interest rates? Have you repaid any money taken from family & friends? Any gaps in these issues need to be addressed and the best option is to utilize this bonus money.
Also, ask yourself if you can allocate some of this money for future benefits. Contact your financial advisor and see if you can allocate some part of the bonus to plan or add to your goals. The extra money helps to reach goals faster. You can also allocate money to annuity investments like NPS, which will help you when you need a pension for living.
Invest In Yourself
Bonus money can also be used to invest in yourself. Let us say ou have already reached a level in my career that you dreamt of five years back. How should you break the glass ceiling and reach that corner office? Maybe you need some more qualifications to add to your CV or some soft skills in your personality – check what’s missing. Bonus money can be used to stay updated on job market requirements. You may join some courses or attend some workshops to enhance your CV.
