Use your extra money efficiently | Fusion - WeRIndia

Use your extra money efficiently

Use your extra money efficiently

Getting a bonus in your job can be a great feeling. Many people work extra hard to get more money. They would plan their monthly bills to save as much money as possible. This brings the question of what to do with the extra money you saved. While there is no harm in spending the money on fun or hobbies, it is not smart to spend it all on non-income earning things. Here are some things you can do with the extra money you have.

Saving for emergencies

You never know what kind of emergency you might have to face. It is always best to save some of your money for emergencies. Try to have an emergency fund which covers three to six months of your monthly expenditure.

Clear your loans

Try to pay off your loans or credit card debts as much as possible. This reduces pressure for you. They can also improve your credit score. You can also upgrade your insurance policies to have better coverage.

Invest for future

Planning for future is important financially. Finding the right investment is very crucial. While safety is important, an investment which is too safe gives you little to no investment. Your investments should also give you tax benefits. Plan out a retirement fund to make your old age comfortable.

When you are making investments, spread them between high risk-high return options and low risk-low return options. Equities and mutual funds can give great returns with as less risk as possible.

When you are managing your extra money always remember the three basic points: Save for future emergencies, clear out any pressure you can, and invest for future. Use these three steps as guidelines to make your investments.

Another important to remember is not to increase your expenditure when your income increases. Saving money is only the first step in having good financial stability.

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