Smart ways to use your Bonus Money

It’s not quite usual that you see in your inbox that certain ‘X’ amount added to your usual salary and credited to your account. Now, intriguingly you call the accounts team or the supervisor and that when you get the good news that it’s the much deserving bonus that you have received for all your hard work this year. ‘Time for celebration’ is the first thing that will strike your mind. Well, that is ought to happen, after all, you totally deserve it. But whenever a large sum of money falls in your lap, you need to have a plan for it (even before you think of a mini celebration), so you don’t wake up a month or two later and realize that it’s all gone. Well, that’s not definitely a way to reward yourself for a job well done. While it may be tempting to blow all that on something fun, excessive spending isn’t the smartest way to handle your bonus. However, allowing your money to work for you smartly is the way to go about it. So here are some of the smart ways to deploy your annual bonus money.

Pay-off earlier debts

It’s kind of a good idea to get rid of financial obligations. And debt kind of priors the list and it should also be amongst your top priorities when you plan to utilize the bonus. Debts like credit card dues, personal loans, business loans etc. should be repaid especially the ones that bear very high-interest rates. Repaying the debts benefit you many ways in return – it helps you save a lot of interest payments, improves your credit score making way for obtaining further loans in the future.

Invest to earn

A long-term investment pays off well. There are multiple options where you can invest your money. You can opt for a SIP or utilize the amount to purchase stocks or lump-sum mutual funds. If you’re looking for conservative medium (no-risks attached), then opt for long-term investment options that offer not just tax deductions but also tax-free returns. You can choose from PPF, Kisan Vikas Patra,National Savings Certificates. If you don’t want any of these options, consider locking up the money in a fixed deposit.

Fund your Retirement Goal

Apart from the above-mentioned investment options, you can consider parking bonus money in a long-term financial instrument such that the benefits can be reaped post-retirement. Even though retirement often looks like a far away event, the earlier you start saving, better is the retirement corpus you can accumulate. And your older self will thank you for taking such a wise decision. A lot of retirement plans are available in the market, so choosing an appropriate one won’t be a problem.

Start an Emergency Fund

Nothing in this world is permanent or guaranteed and it’s always wise to be prepared for the unexpected. Let’s say your salary takes a hit or your car breaks down or a family member gets hospitalized. To take care of these unexpected events, it is important to have a contingency or emergency fund. And if you still have not created a separate fund for contingency then, you certainly need to create one with the help of the bonus amount received. Experts agree that it’s smart to have three-to-six months;worth of savings tucked away, or even more, to help protect you in case of disaster. So you can utilize this amount to get closer to this goal.

Enhance insurance cover

You need to on and off check whether the current life insurance cover you have is enough to service the needs of the family in the absence of the breadwinner. Now that you have a lump sum amount in hand, you can always get the cover enhanced. In the same way, review the health insurance that you own and go for a top-up policy if needed. Remember, that medical inflation is rising a 10% plus rate every year. Having a health insurance of at least Rs 5 lakh is a necessity in today’s situation.

Invest on Yourself

With the rising competition, self-development at any point in your career will help you stay on the floor. So, investing your bonus money to learn a new skill sounds like a great idea. Something which could be relevant to your job or an area of personal interest, such as photoshop, advance use of excel, an advance course, etc. It could be anything! Basically, anything you’ve been putting off for the longest time. Having said that you can also learn new things that you are passionate about – it could be learning a new instrument or learning photography skills or even culinary skill. All this would boost your confidence and help you grow professionally and personally.

To know more about smart ways to use your bonus money or a long-term financial planning connect with our financial planning expert for a better and secure future.

All that you need to know about Travel Insurance

Whether it is for business trips or holiday with friends and family, traveling in India or abroad these days has become an integral part of our lives. We have become more mobile than ever before. But with the increased number of travelers and rate of travel, the occurrence of multiple travel related risks are also increasing. From misplaced luggage at airports to costs incurred due to transit delays to falling sick at foreign lands, traveling can sometimes offer a lot of inconveniences and one should be prepared! It is important to take measures and protect oneself against unforeseen circumstances so the rest of the trip goes smoothly and as planned.And who can help you in minimizing all these risks? A travel insurance policy. A comprehensive travel insurance policy offers many benefits such as medical expenses and loss or baggage. However, one can also opt for a specific policy that fits the purpose and duration of the trip.

Let’s find out more.

What does travel insurance usually cover?

A travel policy usually allows you to cancel your trip for the following reasons-injury or illness, a missed connection, or an unpredictable event such as earthquake, terror attack, etc. If your trip is derailed for one of these reasons, you’re entitled to a reimbursement for costs that are usually not refundable. It also covers medical expenses incurred during travelling. Some policies may also provide cover for other situations like medical evacuation to India, accidental death or disability benefit, losses due to flight delays or loss of documents or baggage loss and more. In addition, some even provide travel assistance in the form of legal advice or facilitating emergency cash transfers. Some insurers also provide cover for adventurous sports activities.

What travel insurance does not cover?

A common exclusion is a pre-existing illness. It refers to any medical condition that has required attention prior to travel or initiation of the policy. So, if you are suffering from an illness or condition like diabetes, blood pressure, cardiovascular problems and so on, the policy will not be covering that. Also, if complications arise from any surgery, illness or accident you sustained prior to the travel those will not be covered in most of the insurance policy. What else doesn’t it cover? Any losses incurred due to breaking foreign laws or caused due to terrorism or making frauds.

What about the cost?

The price and duration of the trip, your age, and optional add-ons–these are the factors that determine the cost of your insurance. A policy typically costs 3 to 5 percent of your trip’s prepaid,non-refundable costs. Whereas a “cancel for any reason” policy (an option provided by many) can run you 7 to 10 percent of the non-refundable cost. Some plan provisions are available only if you buy the policy within 14 days of your initial travel purchase. Some policies are more expensive if you’re older or are engaging in risky activities like bungee jumping, rock climbing, paragliding, etc.

What should I look for when picking a policy?

Consider what kind of a traveler you are and pick a policy accordingly. Say, if you are a frequent traveler (if you take more than two holidays a year), it is best to take an annual travel policy as it will be cheaper than a single trip policy. A single-trip policy is ideal for a one-time vacation or business tour! Also, if you or a family member has a medical problem that could require a cancellation,confirm that your policy includes a waiver for pre-existing conditions (this is the most common reason claims are turned down). These are few factors that you can look forward to when selecting a policy.

Where can I find a good policy?

Travel agencies offer policies that will generally cover you for the duration of your trip, but you should definitely do your homework before picking that up. Most airlines, cruise lines, and tour operators offer optional insurance (also called wholesale policies) that tend to have more exclusions.You can also go through multiple websites for reviews and compare policies. You can also buy direct through one of the travel insurance companies.

Wondering about your travel Insurance ?? Want to know more about travel insurance and plan. Feel free to write us on

What do Millennials save for?

Millennials—people born between 1980 and 2000. People whose traits are positive—they are earnest, positive, seek new experiences, and display a high level of social consciousness. They have expectations from life (positive ones), they work and strive for the best, they use technology, they crave for work-life balance and give a lot of attention to new experiences in life. Millenials are go-getters, hard-working, they are careful about their spending and saving. They are also known to handle responsibilities better, take challenges as opportunities and face competition which otherwise their previous generations haven’t had to face so intensely. Our Millennials are pretty thrifty when it comes to saving money and they know exactly where to spend that. Let’s find out how financial planning for millennials can help them for a better and secured life ahead.

Saving to see ‘The World’
Travel is a wonderful thing. It broadens your horizon. It helps you get a better perspective. It takes you out of your routine life and what not! Millenials, the generation of go-getters are the ones who soulfully believe in this concept and totally live for this. For Millennials traveling matters more than anything. The backpacking trip to Indonesia, biking trip to Ladakh, solo trip to Canada would have been unthinkable choices for the Generation-Xers. But for Millennials the bucket list is getting bigger and better with each passing year. So it’s quite natural that saving for travel is a priority for millennials. And thanks to the economy that has made travel a cheaper and more flexible affair, the love for traveling among Millennials is only growing. They would rather take regular holidays than save for a home or car. Their motto lies in Saving, Exploring, Getting Amazed, and Repeating the same.

Saving to buy more experiences
Millennials tend to define themselves by their experiences more so than other qualities or factors. And it’s not just travel or adventure sports or cultural experiences that they are addicted to. In fact, they value all sorts of experiences—live performances, sporting events, concerts, social events, food fairs, photography and the list goes on. More than aiming to spend on possessions, they love saving for varied experiences of life. They aren’t spending our money on cars, TVs, and watches. In fact, they are renting scooters and touring Goa, rocking out at music festivals, or taking part in Marathons. So after aiming to tour in maximum cities or countries, saving for experiences comes as a high priority for them.

Saving to take better care of themselves
Although open to new experiences in life, Millennials avoid getting addicted to things that seem to harm their body in more ways than one. Millennials are, by and large, eating more healthily than any previous generation. They eat more ethically and are aware of what’s served on the platter. They are also more likely to take part in healthy behaviors (social media influence for good), such as exercising regularly and maintaining a healthy weight. For millennials, value and product quality are important too and they favor things that are natural and organic (from food to cosmetics). So, it’s an obvious thing that they save up to invest in taking better care of themselves. Plus staying healthy helps them save a lot more too.

Saving to maintain the same lifestyle post retirement
The ability to maintain a similar lifestyle in retirement in a satisfying and fulfilling way is one of the biggest concerns for millennials. The key to achieving financial comfort in retirement is to have a clear understanding of the financial resources and the demands on these resources both now and in the future. It is kind of given that Millennials do understand the importance of retirement planning and getting an early start on building retirement security. Many surveys have also shown that when searching for a job, they look out for retirement benefits or make sure to save a certain percentage of their salary in PF accounts.
Additionally, it has been found that millennials purchase their first mutual funds at a younger age compared to their earlier generation. Millennials are still in their prime years to start investing, so you can expect this number to rise at a faster rate than older generations that should have been saving for decades already.

Team SBS Fin is working constantly to help you plan finances better and to help the millennials with setting financial goals as per their bucket lists. Wondering about your travel wish-list?? Feel free to write us on