As we approach financial year ending, annual bonuses are doing the rounds in the minds of many of us. Annual bonus is treated as easy money and is splurged on treats, gadgets and parties. However, instead of falling for instant gratification we should be judicious in using bonus money.
Pay off any high interest personal loans or credit card debt.
Prepay your home loan, if any.
Increase your emergency fund.
Invest a part amount towards your retirement and children’s education and marriage.
Don’t buy any wrong insurance policies through bonus money.
You can donate part of the sum for a good cause.
Ideally, bonus money should not stay in your savings a/c and should be immediately deployed.
And of course, by all means do enjoy by spending a part of the bonus.
We must be extra careful with this extra income and should not get excited by letting it go fully in a splash. You earn your bonus by working hard through the year, let that money also work hard for you.
Reinvest your profits and bonuses. Don’t be tempted to spend your profits, reinvest the them instead. Even a small sum can turn into great wealth.-Warren Buffet.
Happy Investing !!