Getting a Bonus? 5 Things to Do with the Increased Money

Getting a Bonus? 5 Things to Do with the Increased Money

Receiving a bonus is a delightful surprise, whether it’s an annual reward, a performance incentive, or a festive gift from your employer. You may want to splurge this amount but it’s wise to think strategically about how to use this extra cash. Here are five smart ways to make the most of your bonus.

5 Things to Do After Getting a Bonus

1. Pay Down Debt

One of the most prudent uses for your bonus is to pay down any outstanding debt. High-interest debt, such as credit card balances or personal loans, should be your primary focus. Reducing or eliminating these debts can save you significant amounts in interest payments over time, improving your financial health and reducing stress.

Action Steps:

  • List all your debts, noting the interest rates and balances.
  • Prioritize paying off high-interest debt first.
  • Consider making an extra payment on your home loan or car loan if your high-interest debts are minimal.

Also read: How to Save 1 crore with a Monthly Investment of Rs 5000?

2. Build or Boost Your Emergency Fund

An emergency fund is a financial safety net that can cover unexpected expenses, such as medical emergencies, car repairs, or job loss. If you don’t have an emergency fund, now is the perfect time to start one. If you already have one, consider boosting it. Financial experts typically recommend having six months’ worth of living expenses saved in India.

Action Steps:

  • Determine your monthly expenses and calculate a savings goal.
  • Open a high-yield savings account or a fixed deposit (FD) to store your emergency fund.
  • Set up automatic transfers to build your fund consistently.

Also read: How understanding the Rule of 8-4-3 can turn your Rs 30,000 monthly into Rs 1.5 cr?

3. Invest in Your Future

Investing your bonus can help you grow your wealth over time. Consider contributing to your retirement accounts, such as the Employees’ Provident Fund (EPF) or Public Provident Fund (PPF). If you’re already on track for retirement, explore other investment opportunities like mutual funds via lumpsum or SIPs, or even gold, which is a popular investment in India.

Action Steps:

  • Review your current retirement contributions and consider increasing them.
  • Research different investment options that align with your risk tolerance and goals.

Also read: 𝗕𝗲𝘀𝘁 𝗠𝘂𝘁𝘂𝗮𝗹 𝗙𝘂𝗻𝗱𝘀 for NRI in India 2024

4. Enhance Your Skills or Education

Investing in yourself can pay off in the long run. Use your bonus to take a course, attend a workshop, or earn a certification that can advance your career. Education and skill development can lead to better job opportunities, higher salaries, and personal fulfillment.

Action Steps:

  • Identify areas where additional education or skills could benefit your career.
  • Research courses, certifications, or workshops in your field.
  • Allocate funds for tuition, books, or necessary supplies.

Also read: What is the 15x15x15 Rule In Mutual Funds for NRIs?

5. Treat Yourself (Responsibly)

It’s okay to use part of your bonus to reward yourself. After all, you’ve earned it! The key is to do so responsibly. Set aside a small portion of your bonus for a treat that makes you happy, such as a family vacation, a nice meal at a fancy restaurant, or a new gadget. Enjoying your bonus can provide motivation and satisfaction without derailing your financial goals.

Action Steps:

  • Decide on an amount you’re comfortable spending for personal enjoyment.
  • Choose a treat that brings you joy and fits within your budget.
  • Avoid impulse purchases by planning how you’ll use this portion of your bonus.

Also read: Getting a Salary Hike? 5 things to do with the increased money

Wrapping Up

Receiving a bonus is an excellent opportunity to improve your financial situation. By paying down debt, building an emergency fund, investing in your future, enhancing your skills, and treating yourself responsibly, you can make the most of this extra money. Thoughtful planning ensures that your bonus has a positive and lasting impact on your life.

Remember, the key to financial success is balance. While it’s important to be prudent with your bonus, allowing yourself to enjoy a portion of it can provide a much-needed morale boost.

Looking to Invest in Indian Markets as NRI/OCI?

For Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs)who shifted to other countries for better opportunities, this bonus presents an option to start utilizing the additional funds for investment in Indian markets.

NRIs/OCIs can now download the SBNRI App and choose to invest in different NRI mutual fund schemes in India with ease. You can also get detailed investment advice from experts at SBNRI. Also, visit our blog and YouTube channel for more details.

SBNRI is an authorized Mutual Fund Distributor platform & registered with the Association of Mutual Funds in India (AMFI). ARN No. 246671. NRIs willing to invest in mutual funds in India can download the SBNRI App to choose from 2,000+ mutual fund schemes or can connect with the SBNRI wealth team to better understand Mutual Fund investments.


Is it normal to get a bonus?

  • An annual bonus of 5-10% of your yearly salary is given in a lot of industries, and a 5-10% annual raise is considered standard.

Is joining bonus good or bad?

  • Getting a bonus provides an immediate financial incentive to join an organization, making it advantageous for both employers and employees.

Are bonuses included in CTC?

  • CTC (Cost to Company) is the total annual expense a company incurs for an employee. It includes all the monetary and non-monetary benefits you receive. The three main components of a CTC are:
    • Cash component (Base Salary, Joining Bonus, Performance Bonus, etc.)
    • Benefits (Health Insurance, Provident Fund, etc.)
    • Other Perks (Company Car, Accommodation, etc.)

What is 8.33 in bonus?

  • According to the act, the minimum bonus an employee should receive is 8.33% of their basic salary and dearness allowance, which is roughly equivalent to one month’s salary.

What should I do with a bonus?

  • Consider these key steps for using a bonus:
    • Pay Down Debt: Focus on high-interest debts like credit cards and personal loans.
    • Build an Emergency Fund: Ensure you have at least six months’ worth of living expenses saved.
    • Invest: Look into options like EPF, PPF, mutual funds, or stocks.
    • Enhance Skills: Invest in courses or certifications to boost your career.
    • Treat Yourself Responsibly: Set aside a portion for personal enjoyment within your budget.

What is the 50 30 20 rule?

  • The rule says that you should spend around:
    • 50% of your after-tax income on needs.
    • 30% on hoodies and other things that make you happy.
    • 20% on savings and investments. 
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