Diwali bonus: How it can change your finances

There is always an urge to splurge. All salaried individuals in India look forward to the Diwali season. Here’s how you could spend your Diwali bonus wisely:

Budget and discounts: Plan out a budget to know how much money is needed for shopping. Browse the Internet thoroughly and find out which online shopping sites are offering exclusive discounts. Remember to compare the prices of discount offers and this can help you make the right purchase decision. Be careful, don’t get carried away by EMI offers, but remember to check the interest rates.

Repay loans: Set yourself free from debt by using to repay some loans. Analyse your finances and decide the extent to which you would want to bring down your liabilities.Investments: Some extra cash in hand always makes you feel like spending on the most expensive product. But spending all of it might make us feel guilty. Instead, set aside this money to kick-start a new systematic investment plan.

Emergency funds: Plan expenses within your regular income. Treat your Diwali bonus as a good source for emergency fund creation. Saving at least three to six months of your salary for short-term bank fixed deposit or debt mutual funds can be beneficial. Adding it to your savings account will help you use this amount in sudden emergency situations.

Gift insurance to your family: A health emergency, an accident, or sudden death – these are some eventualities that you and your family must always be prepared for. Health and retirement insurance can be the only strong shoulder which your family can depend on. Buy an insurance plan with yearly mode payable at the time of Diwali.