Diwali Bonus 2023: From cleaning our homes to buying new clothes, shopping online to pooja purchases, celebrating festivities to sweets gifting to community gatherings, Dussehra and Deepawali are truly the most cheerful times in India as the entire country gets drenched in the festival of light and sounds.
This also is the time when shoppers are at their peak spending with offers galore especially nowadays with the Great Diwali Sales across E-commerce websites.
Several companies hand out bonuses in cash and kind to their employees which are then spent on the celebrations.
However, despite the risk of sounding like a damp squib, budgeting is one of the key elements of financial planning and it is at these times that spending needs to be watched and done. Following are a few things that if kept in mind can help you enjoy the festivities without compromising on your essentials in life
Ensure you have an Emergency Corpus – Post Covid the relevance of this cannot be overemphasised and any spending that is done should be only once an emergency fund worth 6m of all expenses (including EMI’s) is there in a liquid instrument (viz. Bank deposits, liquid funds)
Pre Plan some Spending – A lot of Deepawali shopping if done a little earlier can help us get better discounts. Things like candles, diyas, etc. if bought a little earlier are available at better deals. This helps save a lot of costs at the last minute.
Switch some physical Gold to SGBs (Sovereign Gold Bonds) – A lot of us buy Gold during Deepawali, Deepawali apart from the gold that you buy for aesthetic purposes, look at purchasing SGBs from the stock exchange is much cheaper, more tax efficient, and earns an additional 2.5% interest also.
System Transfer Plans and Asset Allocation- If the amount of the bonus is large, consider investing the same into a proper mix of various asset classes like Index Funds, Active Equity Funds, Bonds, Bank Deposits, SGBs, etc.. If you are in a lower tax slab, you can look at debt funds and some international funds as well. Lump sum investments can be avoided considering the recent run-up in stock prices especially in small caps. A staggered deployment through Systematic Transfer Plans posts a detailed consultation with a registered investment advisor would be ideal.
Muhurat Trading – A lot of investors deploy large sums during Muhurat trading due to the auspiciousness of the occasion. It is recommended to treat this auspiciousness with a token purchase and buy basis the merit of the day and price.
High Yield Corporate Bonds – Corporate bonds generating high yields have been quite a in vogue recently and despite the attractive rate of returns, it is important that individuals seek proper financial advice before investing in these bonds as unlike equity bonds carry a 100% principal risk in case the issuer gets bankrupt. We have seen such cases in the immediate past like IL&FS and DHFL. Do ensure you invest within limits and risk parameters.
Deepawali is a great time to celebrate, however, we need to ensure that we do not go overboard and invest our hard-earned money the right way keeping our and our family’s security in mind.
Wishing you all a great Deepawali and a prosperous year ahead.
-The author is Co-Founder, GoalTeller. Views expressed are personal.
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