Increase investment in SIP along with repaying the loan

Lucknow| Emergencies such as job losses, sudden medical expenses or home repairs occur unexpectedly. If you are not ready for this, it can destabilize you financially. This is the time when emergency funds can be helpful in meeting essential expenses without withdrawing money from your savings. Therefore, use Diwali bonus to create emergency funds. Every person must have such an emergency fund that his basic needs for 6-12 months are met.

Investing in mutual funds can prove effective in achieving long-term financial goals. Increasing SIP investments regularly is an effective strategy to reach your financial goals faster. So, if you do not have any outstanding bills or loans, it would be financially wise to use Diwali Bonus to increase your SIP contribution.

With the increase in medical inflation, the cost of health services is increasing rapidly every year. This is why having adequate health insurance coverage has now become a necessity.

If you haven’t got health insurance yet, use your Diwali bonus to buy a comprehensive health insurance plan for yourself and your family.
Bonuses can also be used to increase coverage by adding riders such as critical illness or maternity benefits depending on needs.

If you want to reduce your debt, repaying even five percent of your total debt is an effective strategy towards achieving the financial goal. The Diwali bonus you got may be useful in this. Alternatively you can also use the bonus to pay additional EMIs to increase your monthly installment (EMI) payments or reduce the tenure of your loan.

If your loan interest rate is too high, evaluate your finances and consider repaying the loan in full. Diwali bonus can be used for long term investments. Equity is preferred to outpace inflation in the long term. Therefore, equity mutual funds are a strong option to meet long-term goals.