Make The Most Of Your Bonus By Investing & Saving The Right Way

Whether it be the bonus you get from your job, or the bonus declared for your insurance plan, getting an additional bit of income comes with loads of happiness! This extra income can help you plan for your next vacation, gift your mom that jewellery set she always wanted, or even give you the cash you need to buy the newest gadget on the market!

However, splurging all your bonus might not be the best course of action. There’s one way you can make your bonus count, and that is by investing it or utilising it to pay off your debts. Consider some of the suggestions below if you don’t know what to do with your job or insurance bonus!

Pay off debts/EMIs

Do you have a credit card or a personal loan? Are you yet to clear the outstanding amount? With the increasing inflation rate it is common that most of us have a credit card. Now you can use the bonus to reduce your outstanding EMIs significantly. This will help you save on the interest amount gradually. You may choose to pay your EMIs and wish to utilise your bonus differently. However, it is advisable to pay off debts early to reduce your financial burden and avoid stressful situations.

Use Your Bonus to Get More Bonuses!

Use your reward to generate more rewards for the future! You can use your bonus to buy a participating insurance plan like Edelweiss Tokio Life- Flexi Savings Plan. Participating plans have the added benefit of profit sharing, meaning that you get a cut out of the insurance company’s yearly earnings! This profit share is called a cash bonus and is a great way to generate additional income for your savings. Edelweiss Tokio Life- Flexi Savings Plan not only has a cash bonus element but it also provides guaranteed income every year, so you will always have a bit of extra cash no matter what!

If you don’t want any non-guaranteed element to your plan, then get a completely guaranteed savings plan like Edelweiss Tokio Life - Premier Guaranteed STAR. In guaranteed plans, there is no doubt about how much money you’ll be getting as income. The returns are always predetermined by a set rate of returns that is decided upon the inception of the policy itself.

Invest Now, Reap the Benefits Later

If you have an appetite for risk, then you can also invest your yearly bonus into stocks or Unit Linked Insurance Plans (ULIPs). Market-linked investments are one of the best ways to grow your wealth over time. However, the downside is that mark-linked funds are volatile, and they can drop in value just as quickly as they rise. ULIPs have the added benefit of providing life cover alongside investments, so your family is kept secure even if you are no longer around!

Renovate Your House

Has it been a while since you renovated your home? Then now might be the right time to renovate/beautify your house. You can buy the appliances and furniture you aspired to make your house look vibrant and stylish. Keep in mind that even a lived-in house is an appreciating asset. So, keep your house well-maintained and up to code is a no-brainer!

Invest in Yourself!

Sometimes, the best way to use your bonus is to enjoy your life to the fullest! If you already have all your investments and debts in order, then there is nothing wrong with spending some money on yourself. Maybe you can go on your dream vacation with your friends and/or family. You can also

get your loved one gifts as a show of appreciation! Treat yourself, destress, and renew your enthusiasm!

Your bonus is not the only part of your income that you should invest or save. The above suggestions can also apply to your monthly salary or dividends from your investments! Being financially prepared for the future requires disciple and meticulous planning. And consider getting a savings plan that can provide you with a second source of income or a lumpsum payout at maturity that can fulfil your future goals. Consider all eventualities that can financially impact your life and stay prepared for anything that might happen in the future!

 

Chirag Iyer - BFSI Enthusiast

Chirag is a writer and an avid reader who loves to drink coffee! His other interests include boxing, karate, and singing.