Here’s How To Use Your Bonus Money Smartly!

By BankBazaar | May 16, 2018

You might have received a financial windfall in the form of bonus recently. Here are six ways to use that money smartly.

Here’s How To Use Your Bonus Money Smartly!

We are always complaining about never having enough money. Yet when we receive a financial windfall, we spend it without batting an eyelid. Don’t we?

You might have received one such windfall in the form of bonus recently, have you? While most people will use it to pay for a holiday or buy a smartphone or some other big ticket item, why don’t you do something smarter? Why don’t you use your bonus to boost your finances?

Using your bonus money for discretionary spending will give you short-term gratification, but you might regret your decision when bills and debts start sapping the firepower in your bank accounts. So without further ado, let’s unveil a list of things you can do with your bonus money to grow your wealth.

Additional Reading: Just Got Your Variable Pay? Here’s The Right Way To Use Your Bonus

Save it to buy a house

Buying property, either in the form of land or house, is a financial goal most people aspire for. Though there are plenty of lucrative Home Loan options available in the market, one still has to gather funds for the down payment, which can be 10 or 20 percent of the purchase price.

Though it’s only a small slice of the total cost in figure terms, down payments can run into lakhs even for a budget property. And we haven’t even factored in costs such as stamp duty, registration charges etc., which can further dry out your finances if you don’t plan ahead.

Funnelling your bonus into savings meant to purchase a house will bring you much closer to your dream home. You can continue this practice for multiple bonus cycles to ensure that at least the road to your dream home is not riddled with bumps.

In case you have a Home Loan running, then use the bonus to pay a few EMIs ahead of time. This will lower your total outstanding amount, making your remaining EMIs smaller.

Start an emergency fund

Emergencies always arrive unannounced. Ideally, a corpus equivalent to 50 percent of your annual salary is good enough to cover emergencies. An emergency fund acts as a cushion for unforeseen circumstances such as job loss, car repair, or an emergency health condition.

Additional Reading: 6 Money Ideas To Consider Before You Splurge Your Annual Bonus

Equities and Systematic Investment Plans (SIPs)

It’s difficult to predict the direction of markets with 100 percent accuracy. If you’ve dabbled in stocks, then you know that this business is full of surprises and unexpected turns. In spite of the volatility and risk, the lure of stock markets is as strong as that of mythical sea sirens.

If you want to try stocks, then exercise caution. Look at long-term investments and take the SIP route. SIPs are best for the average investor who does not want to take risks. Starting an SIP in equity-related investment options can yield decent returns over a long period of time.

You can invest in Mutual Funds that tilt towards equities and invest in them via SIP. This way you reap the benefit of high returns and you can rest assured that your money is being managed by professionals.

Additional Reading: What to Do With Your Bonus Money

Enhance your insurance cover

You must evaluate your insurance needs such as sum insured, riders, etc. from time to time. If you feel your Life or Health Insurance cover is not enough, then using your bonus money to increase the sum assured sounds like a smart idea.

The cover amount must be periodically reviewed to make it meaningful in terms of the security it provides. When you get a bonus, it is the ideal time to review and upgrade your insurance cover. An increased sum assured is sure to meet the ever-changing and growing needs of your family.

Upgrade your car

It’s getting costlier to maintain petrol cars due to the ever-increasing price of petrol. Driving a petrol car will cost you north of Rs. 4 – 5 per kilometre. On the other hand, CNG will cost only one-third of this amount. Most people maintain petrol and CNG settings and switch between the two according to their needs.

Additional Reading: How to P.A.R.T.Y with your bonus!

Let’s get gold

Gold prices are closely linked with that of oil and currencies. Hence, any change in the global economy is quickly reflected in the price of gold. Barring minor fluctuations, gold prices have only seen an upward trajectory historically. This makes the shining metal a lucrative investment option.

Surplus money as a bonus can be utilized to acquire gold either in the form of jewellery or coins. Serious investors prefer coins and bars over jewellery since making charges while purchasing the latter can dent the value of the investment.

Additional Reading: Follow These Rules For Successful Investing

Your bonus is an extra source of fund that is usually not factored into your budget. This gives you ample room and an ideal opportunity to make financial decisions that had been pushed to the sidelines due to a lack of funds. So, when you get your bonus money, invest it in the right place. We have a few investment options that you might like. Click the link below to start exploring.

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit for the latest rates/offers.

4 thoughts on “Here’s How To Use Your Bonus Money Smartly!

    1. Team BankBazaar

      Hi Ashish,

      We’re glad we could be of help. Keep reading our blog for more insights into the world of finance.

      Team BankBazaar

  1. Swetha

    Wow!! Really this is a good article, You’ve done a great job. I found some interesting stuff over this post. Thanks for providing this information here and please keep posting.

    1. Team BankBazaar

      Hi Swetha,

      It’s so nice to hear that. Thanks for stopping by.

      Team BankBazaar


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