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Got a Diwali bonus? Here is how you can use it efficiently

Priyadarshini Maji
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Most salaried persons receive Diwali bonus, sizeable lump-sum amounts and end up spending the money erratically. Such a lump-sum, if used properly and in a disciplined manner, can be utilized in various ways.

Most people look for the Diwali bonus to splurge and spend it all. However, there are people who use this money efficiently by investing and keeping some aside for a rainy day. Even though you might feel the urge to spend all the bonus money in one go, you should look at your necessities and dues first.

Find out how you can use your Diwali bonus efficiently;

1. Get rid of outstanding dues
Have as little debt as possible, and if you have any debt, try to clear the pending dues. Be it credit card dues, ongoing loans, or EMI payments. This way you will avoid falling into a debt trap. Credit card dues, for instance, are unsecured loans and carry a high rate of interest. Hence, if you are only paying the minimum amount or miss out a payment, you will be charged an interest ranging from 36 to 48 per cent on the outstanding balance. Additionally, this will also affect your credit score.

If you pay off such dues, be it a personal loan, car loan, or even home loan with any extra money you have got, it will reduce your interest burden. If not the full payment, try to clear at least a part of your dues using the bonus amount.

2. Invest some money
Use some of your bonus to fix any investment gaps in your financial planning. Even though most of the people who plan their finances and invest for long-term goals such as retirement, child’s education and so on, those goals are not easily achievable. With lump-sum money coming in, try to invest as much a possible so that you could meet your goals. Experts suggest such lumpsum contributions to the existing goals can help an investor accelerate and meet their goals or meet any shortfalls.

If you want to save for some short-term goals such as going on a trip or buying something expensive, experts suggest investing the lump-sum amount in liquid mutual funds.

3. Then Splurge
Many use such bonuses to buy new gadgets, be it a phone, TV or other electronics, or go for a much-needed holiday. Experts suggest one should spend the money as one likes as such a bonus amount is something one has earned. However, one should splurge it only after paying off some of the debt and dues and putting some money towards financial goals.
If you are among those who do not want to buy anything new during the festive season but want to fund a holiday with that money, then that is a much better idea than taking a loan to go on a holiday.