DIWALI BONUS? Use your Head not HEART !!!
Happy Diwali Friends,
Its BONUS TIME !
Whether you are salaried person or self-employed, Diwali is one festival where BONUS is assured.
The TV ads and the full page ads on newspaper are attracting you with the latest model of that iPhone, the Latest Tanishq Jewellery
And of course, Amazon and Flipkart are always there to make sure that you spend that last paisa of yours.
So, off for a shopping Binge ?
Before you make that Bonus money disappear as fast it appeared, we at SRIKAVI WEALTH, request you to kindly go the points mentioned here and then decide.
Avoid Impulse Buying.
No. I am not spoiling your Diwali mood but only trying to make all your future Diwali a celebration.
Before thinking of
whether to PURCHASE, SAVE, INVEST, DONATE…..whatever….just keep it in a liquid
fund (or Bank SB) for 15-20 days to give time to yourself to brood on HOW BEST
TO UTILISE THIS BONUS MONEY.
The 1st preferance should always be..FULFILL NEED …..only after these NEEDS are fulfilled comes the WANTS.
1. Settle Pending Bills and Debt
The foremost and best option to spend your Bonus money is to clear off Long pending bills and most importantly any Debts you may have, especially Credit Card Bills.
(except of course, Home Loan, for which sitting with your financial Planner would be better).
Most importantly, clearing off debt would boost your self confidence and improve your Credit Score too. Try to make sure that you REDUCE your existing Debt and get out of EMI Trap.
Reducing Debt also ensures that you can truly ENJOY Diwali stress-free.
BTW, if you have too many debts, start with paying off one with the HIGHEST INTEREST RATES and gradually tick off the others.
WITH AN EMERGENCY FUND:
One of the biggest lesson that COVID has given all of us is the importance of having an EMERGENCY FUND and what better way to start than with your Bonus Money. Contingency Fund acts as a Shock Absorber of a Financial Plan. Absence of it can make a Financial Plan turbulent. Once you have this covered….then the mental peace you have is unparalleled.
It seems stupid to lock away 6 months of Expenses in that lowly Liquid fund when your friend is minting money in Day Trading.
Emergency Fund is for emergencies and Covid Pandemic has shown us the value of this Emergency fund. Each asset class has its place in the Sun and your Rainy Day fund is a MUST HAVE .
Buy that Long Pending Asset.
Long Pending Asset like buying Gold for your wife, a Car for the family, or an Appliance for the house or even a Membership is also recommended as otherwise people tend to go for EMI.
Of course, before buying make sure that the ASSET is truly required and you are not buying just because you have money (or to show off).
You can even PLAN for future BIG purchases by way of investing in Debt funds and doing a Systematic transfer Plan to build a corpus.
Once that corpus
reaches your target…PURCHASE THE ASSET WITH YOUR MONEY AND NOT WITH EMI.
Invest in Tax Saving Options
Instead of waiting till March to complete your quota of 80C investment, do it now.
Do it when you have money.
Better now than later.
If you are in a profession which requires you to constantly upgrade your knowledge, technology, etc.
this is the best time to invest in a Top-End course you always wanted to do
Attend that conference of your favorite Trainer.
Attend, Learn, Implement and be amongst the best.
Why not learn a new
skill so that you can generate alternate source of income ?
Why not join a Yoga course and rework on your Health ?
TOP UP YOUR INSURANCE COVER:
Bonus is a great time to top-up your Insurance Cover, especially if you are under-insured.
Do consider investing a Lumpsum in your existing Sip to not only average your Cost of purchase but also to ride the Compounding Magic.
The markets have been more bearish rather than bullish for nearly 2 years now and its a great time to invest that Lumpsum in your existing sip.
Any uptrend will ensure that the bonus will give that EXTRA cream to the overall portfolio returns.
Consult your Financial Advisor before investing.
Other important options which you should consider, is
1. Update your Emergency Fund
2. Cover the shortfall, if any, in your Long term Goals (Child Education, Retirement, Home, etc)
For all these sitting with your Financial Advisor is a must as he will be in a much better position to recommend the right avenues for your Bonus Money.
Not everything must be connected with Materalistic World.
You are doing all this Donkey's work for the happiness of your family.
Why not take them off to the Long Pending Family Vacation?
Why not get them long pending long cherished clothes, shoes?
And why not??? Its Diwali season and there are offers galore.
GO OUT AND ENJOY.
GO AND HAVE A
But, of course, ensure that all the above options are cleared, settled and then go ahead.
Remember, BONUS IS NOT FREE MONEY.
It has been given to you as you have worked hard and you deserve it.
Bonus is NOT FOR YOU TO SPEND MORE.
So, when you do receive that Bonus money, preferably SPEND about 25% of the Bonus Money and use the rest of 75% for the above list.
USE YOUR HEAD and not your Heart.
Wish you a Great Diwali and all the very Best.
Author – Don’t Retire Rich