The Diwali bonus is usually expected during this time, with spending lined up even before the start of the festive season. Some of you may have already received your Diwali bonus, while others may be waiting for it a few days before Diwali.

Although you may be tempted to blast it immediately on a shopping spree and dining out during the current festive season, but it is better to use the money wisely as it is not not every month you receive an additional lump sum.

Although it’s called “bonus,” it’s your hard-earned money that you’ve worked for throughout the year. Therefore, in addition to enjoying the festive season, it would be wise to use your Diwali bonus wisely.

No one is stopping you from indulging in a little festive cheer, but finding a balance can make all the difference. Let’s find out how you can use your bonus wisely.



Pre-close your loans

If you have outstanding debt, it is ideal to use the lump sum to pre-close your loan(s). You should target your unsecured loans such as personal loans and credit card dues first, if any, then focus on secured loans such as home loans to reduce the interest burden.

According to Rishad Manekia, Founder and Managing Director of Kairos Capital, a Mumbai-based financial planning firm registered with the Securities and Exchange Board of India (Sebi): , interest rates on loans. have also increased. If you have outstanding loans, especially expensive loans like personal loans, outstanding credit cards, etc., you can use Diwali Bonus to repay those loans in whole or in part, whenever possible.



Make full payments

“If you need to buy or replace a gadget/electronic item in your home, you should avoid falling into the trap of ‘No-Charge IMEs’ or ‘No-Charge IMEs’. Instead, you can use the bonus amount to fund the purchase immediately,” says Arijit Sen, registered investment adviser with Sebi and co-founder of Merry Mind, a Kolkata-based financial advisory firm.

There may be several offers on the market, and you might be tempted to buy several items on several loans, but it makes sense to assess your repayment capacity first and settle for the one you can fully afford. .



Start building a provident fund

For many people, it becomes difficult to set aside monthly salary funds to build up an emergency corpus; for them, bonuses can be a way out. Ideally, one should have an emergency corpus equal to six months or one year of expenditure.

“If you do not have sufficient provident funds or if you have used part of your provident funds during the year, you can put the lump sum into an appropriate debt asset as a retirement fund. emergency,” Sen said.



Set aside for short-term commitments

If you are planning to buy something like a house or a car, setting aside the lump sum can help you set aside the down payment. You can also save for short-term goals such as vacations or financing a course. Short-term financial commitments like investing in an apartment, repairing or renovating your home can also be considered.

Boost your long-term goals

Bonuses can be a good way to increase your long-term savings for goals such as raising children, retirement and getting married. Your bonus could also fill in the gaps in your long-term investments and help you save a surplus.