Diwali is almost upon us, which means it’s time to receive the much-awaited bonusat work as well. This year along with the regular Diwali purchases like fireworks, jewellery, utensils, and clothes, save a portion towards your long-term financial wellbeing. Wondering how? Here are some smart money investing methods to help you get started.
Reduce your high-interest debts
Use your bonus to pay off any high-interest debts first. By doing this, you ensure that you don’t end up shelling out to pay large EMI instalments in the long term, thereby reducing your financial obligations. Additionally, you can opt for part prepayments on loans wherever possible.
Along with saving finances, paying off high-interest debts at the earliest helps you maintain your credit scores in check. How? Because timely repayments are important to build a positive repayment history and maintain a high credit score.
Build an emergency corpus or a contingency fund
If the pandemic has taught us one thing, it’s the importance of emergency funds to get by financially unstable moments. So, if you have some extra funds from your Diwali bonus, consider putting them into a contingency fund that covers roughly six to twelve months of your overall expenses.
Make sure these funds are stored at a place that allows instant withdrawals, like a savings bank account, an overnight fund, or a liquid fund.
Additional Read: Why Is Diwali the Best Time to Buy Property?
Put some funds away for your retirement
If you want to enjoy retirement without compromising leisure, hobbies, or travelling, you need to start saving up for it as early as possible. If you haven’t started yet, spend this year’s bonus on a retirement fund.
Take a good look at your present financial obligations and take stock of your future ones to determine an amount you can set aside comfortably. You can also invest in government bonds, a Public Provident Fund (PPF), or a government-backed scheme like the National Pension System (NPS) to save for retirement.
Make a large down payment
If you are planning to get a large loan like a vehicle loan or a home loan, you’ll be required to make a down payment. So, if you can, use your bonus to make a bigger lump sum as a down payment.
By putting down a large down payment, upfront reduces the overall repayment costs since the amount you secure from your lender is lowered significantly. This means you pay smaller monthly EMIs as well.
Additionally, large payments upfront can reflect good financial management on your part. Since this reduces lending risks, lenders are more likely to offer you a more attractive interest rate! Before making the down payment, you can use a home loan EMI calculator to calculate your potential EMIs, interest payable, and how much you can save.
Additional Read: Millennials to Invest in Real Estate Sector This Diwali
If you’re in the market for housing finance to own your dream home this Diwali, turn to Tata Capital. We extend easy-to-meet eligibility terms, and flexible EMI plans to ensure comfortable repayments.
With us, secure loan amounts up to Rs. 5 crores instantly and enjoy competitive home loan interest rates, starting at 6.70%.
Visit our site to learn more today!