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Sunday 21 May 2017

Done with appraisal cycle… what to do with increment…..

Friends, I hope your hard work got the recognition and you have done with your appraisal and have earned that well deserved increment and bonus as well. Most of us already have some plan for the additional salary. Some of us feel the need of new gadget and some of us might have plan for an exotic vacation or simply spend on some other stuff. Before we go ahead and spend the additional income we must think that do we actually need these stuff or not? Before you spend your "extra money”, why not use it in a better way?  
So what are the way to use extra money? Please follow..
  • Create An Emergency Fund: As a thumb rule, have at least six months’ worth of your monthly income in an emergency fund. So if you got increment it means you should increase the emergency fund by same proportion. If you don’t have an emergency fund, create one immediately.
  • Repay your short term Debts: You can also use you extra income to make principal repayments on existing liabilities – personal loans, credit cards which are the most expensive form of debt. This will result in lower interest payment that means saving.
  • Review & Buy Insurance: As a thumb rule, we should have a cover equal or more than 10 time of our annual income. So if you got increment it means you should increase the emergency fund by same proportion. If you don’t have an Insurance cover please go and get it immediately.
  • Invest in your career or yourself: Investing in yourself may be the most profitable investment you ever make. We should improve our skills. Higher education is one of the way to do this but not the single way. Expand your knowledge and explore the outside world.
  • Review Your Financial Portfolio: We need to Revisit our financial goals and make sufficient provisions for them. We must save and invest 30% of our income, so it is the time to plan some more SIP with extra income to our secure future.

1 comment:

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