It is an exciting year for Shruti. Her dedication and hard work finally paid off as her year-end performance review earned her a big bonus! While she couldn’t stop thinking about all the big-ticket purchases she could make or plan the perfect vacation with this extra cash, she is left wondering if it is the best way to spend her money. 

Are you also expecting a year-end bonus and wondering the same? Here are 5 ways to make the most of your bonus this year.

1. Repay your debt

Do you have a high-interest loan or a credit card bill you’ve been carrying over every month? This bonus is your opportunity to reduce the debt – and possibly pay it off entirely. The interest amount on credit cards can mount quickly and so it is best to focus your money on repaying these debts. Not to mention, this will reflect positively on your credit score.

2. Start an emergency fund

Financial emergencies can knock at your door at any time. To tide over such uncertainties, having an emergency fund is your best bet. And if you do not have one, it’s time to start your fund with this extra cash at hand. 

Ideally, you should have at least 6 months’ worth of expenses in an accessible savings account. Or you could consider investing a part of the bonus in a liquid fund that offers higher interest rates. This way, you can achieve peace of mind and withdraw funds easily during a financial crisis.

3. Invest for long-term growth

If you have certain financial goals to fulfill, the extra cash from your bonus will allow you to invest in these goals with ease. Depending upon your needs and risk tolerance, you can diversify your portfolio with different investment options.

For instance, to reach your goals faster, you can invest in equity mutual funds through SIP. Or consider investing in Fixed deposits or PPF, if you are a traditional investor.

4. Get insurance

You can also consider purchasing a term life insurance or health insurance with your bonus. A good insurance policy plan can help you secure the present and future of your family. And the best part? It is easy on the pocket and you don’t have to spend significantly from your bonus on insurance premiums. Moreover, if you already have a policy, consider increasing your current cover with the extra money. 

5. Invest in yourself

You could use your bonus to learn a new skill and upgrade yourself. This could be a personal skill, such as learning to play any instrument, a new language, or public speaking. Or a professional skill to advance your career like adobe, excel, a financial program, and so on.  Investing in yourself will not only accelerate your personal growth, but you might be able to bag a better job later, increasing your earning potential. 

Over to you

Earning a bonus as a reward for your exceptional work is always satisfying, but you will not be able to reap the benefits of your money unless you manage it smartly. Ready to invest your bonus for a secure future? Download the Moneyfy app to begin your exciting investment journey today!

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