Know the different investment options to use this money effectively

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Diwali bonus: Know the different investment options to use this money effectively

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Most employees are eagerly awaiting their Diwali bonus from their employers. They plan in advance how they will spend the money. Most of the time people splurge or spend it all. There are also people who invest it or keep it aside for future purposes. Let’s understand different ways to use your bonus wisely.

Pre-close a readyif only

You can use this lump sum bonus amount to settle or partially repay a loan. Prioritize payment of unsecured loans such as personal loans and credit card fees, if applicable. Once this is over, focus on secured loans such as home loans to reduce the interest burden.

Repair your investment shortcomings

You can use your bonus to fill investment gaps in your financial plan. Most of our savings are earmarked for long-term goals such as retirement, children’s education, etc. However, not all of us are able to achieve these goals easily. We may have to put some of our goals on hold until there is a significant salary increase or existing debts have been satisfied.

Invest in insurance

Investing in insurance coverage is one of the prudent ways to invest bonus money. The insurance ensures his own future as well as that of the family. Moreover, it helps you to get a good amount when the insurance policy comes to an end.

Random but prudent spending

If you’re not deploying that money in investment tools, invest your bonus in essentials, such as learning a new skill or language, home upgrades, level of essential appliances or any electronic items your family needs.

buy gold

Investing in gold is another option available to people during the Diwali period. They have both gold investment options, dematting and physical gold.

Use the bonus for short-term commitments

If you are planning to buy a house or a car, the bonus money can help you later. It is therefore advisable to set aside the lump sum that can help you while paying the down payment. You can also save for short-term goals such as vacations or financing a course. Other financial commitments like investing in an apartment, repairing or renovating can also be given

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