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Smart Ways To Make the Most of Your Yearly Bonus - ABSLMF Blog

Your Yearly Bonus Could Do Wonders If Handled Smartly

Jul 12, 2018
3 mins | Views 391

Sabina, an advertising professional engrossed in work, noticed her phone light up from the corner of her eye. It was pay day and every beep from the phone was being monitored as if on high alert. Sadly, sale notifications had poured in all day leaving Sabina disappointed. So, this time she chose to ignore the notification as an important brief by her manager was underway. The meeting got over and Sabina picked up her phone. A big ear to ear smile with a big Yipee followed.

Sabina ain’t the only one who is in a celebration mood. It’s that month when more often than not, we are smiling our way to the bank. Yep! The performance bonus pay-outs happen this time around.

The big fat bonus sure gets us happiness but this once a year phenomenon can give lasting peace and happiness when handled smartly. Some planning and a little determination can secure many ambitious goals also. These are some ways that can keep you on top of your money game.

  1. PYF: A bonus calls for celebration so “Pamper Yourself”. After all you have earned the bonus after a full year’s hard work. Go on a mini vacation or take up that club membership you have been eyeing for long. But remember not to splurge your entire bonus. Limit yourself by dedicating a portion of your bonus say 10-20% for pampering yourself and rest of the amount should be channeled towards investing intelligently. See how this millennial fulfilled her desire to become her own boss
  2. Break-free from the Debt trap: What better than living a debt free life? That’s definitely financial freedom at its best. Loans, outstanding credit card bill, hefty dues should be cleared using bonuses. The rule of thumb is to finish the most expensive loan first such as a credit card bill or car loan. It may momentarily make you feel sad for not being able to splurge your bonus, but the peace of mind will more than make up for it. So go ahead and call it the Freedom Fund.
  3. Bucket your Bonus: Our investing goals should be put in separate financial buckets, and regular investments should be added to them. The buckets can be anything from planning that dream car to sponsoring retired parent’s world tour or children’s higher education. Bonus can be a great way to pad up the buckets and see your goals come alive.
  4. Make taxes #NotSoTaxing:If you have not been utilizing tax exemptions limit fully then consider taming your taxes well in advance. Tax saving is usually left for last quarter, often times last month. Break the tax spell by investing a part of your bonus towards tax saving. Align your tax saving investments to your investing goals and kill two birds with one stone.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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