Whether you are a kid or an adult, almost everyone is excited when Christmas season comes. Aside from the awaited reunions with your loved ones and gifts to be received, there is another thing that excites the working population, holiday bonus or 13th month pay. This income is like an incentive for the working population as it gives them an opportunity to spend for themselves without breaking their monthly budget from their salary. Remember, there are only 12 months in a year so this 13th month pay may be treated as disposable income because no month is intended for it to be spent. Regardless of being disposable or not, it is easy to be tempted to spend the entire amount to make yourself feel better. If you look at the bigger picture, this bonus may only be a once-a-year opportunity so managing it very well should be a consideration to help in your overall financial stability. With this, why not apply some money management tips? Thinking of what to do with 13th month pay usually includes buying luxuries or spending it on anything that piques your interest especially after a year-long stress from work or to satisfy the inner child in you. There is nothing wrong with spending for yourself but if you consider about the future and the unexpected inflation, you might realize that financial literacy is more important than consuming the entirety of your 13th month pay. So, why not start planning or budgeting your 13th month pay like what your normal routine for your salary? To help you start, here is a simple list of must-learn money management tips that you can apply so you can appropriately plan and be wiser on what to do with your 13th month pay.
What to Do with Your 13th Month Pay?
- Pay your debts
Wouldn’t you feel better if your debts are completely paid? For an average-earning employee, there are times where availing loans is the only answer to make ends meet for your necessary expenses. Debts may sound intimidating but having such is not an issue especially if you can pay it on time. With this, since 13th month pay is a huge sum of money, it is an opportunity to speed up your debt repayments. Being ahead of the due date will help you save on interest payments and will make your credit rating more favorable. Surely, if your debts are paid-off, your Christmas shopping will be more satisfying as you would not feel guilty of buying something for yourself because there is no more debt to be repaid or the amount has been lessened to a level that is not worrisome.
- Start or increase your emergency fund
The key to being financially stable is not just depending on your investments. You should also have a readily available cash to spend especially in times of emergency. So, when deciding what to do with your 13th month pay, you should definitely allocate a portion for your emergency fund.
In life, financial setbacks are common. This is where your emergency fund comes in handy. It helps you cover the unplanned expenses with less consideration of financial borrowing. With this, it is ideal to allocate extra amounts on your emergency savings until it is fully funded. You will realize its importance especially on unforeseen circumstances especially on medical bills, unexpected auto repairs, and other unplanned and necessary, yet huge amount, spendings to make in the future.
- Invest in insurance policies
Insurance policies are a good addition to your emergency fund as it helps you pay for necessary expenses on unforeseen events. Practicality wise especially if you have your own family, you need to be ready on the potential risks of losing your life whether from an illness, injury, or accident. Other than insuring your life, you can also insure your properties to receive a compensation to recover property cost when it gets damaged or destroyed. It might be taxing to pay the premiums of an insurance policy but if you have an extra, you should definitely consider availing such because there are moments in which your emergency funds will not suffice for the unforeseen expenses like when your property is destroyed or when you get seriously ill.
If you already have an insurance policy, you may consider getting other investments to widen your portfolio. There are a lot of low-risk investments to start when you are still learning to invest. With this, you do not have to rely on the low interest returned by a savings account thus giving you an opportunity to earn more passively.
- Give something to yourself
You do not have to allocate everything in your savings or investments. We also have our self-needs to satisfy. It is also important to let ourselves feel better and furnish our hard work for the year. One way is to satisfy our wants like buying the gadget you wished for, spending on your hobby, and many more. Others might feel guilty of spending on luxuries but this spending should be seen as a reward for yourself rather than an unnecessary expense. Remember that part of our existence in this world is to enjoy the best things in life. As long as you are aware of your priorities, having an extra and rewarding yourself will not be a problem. In most cases, it becomes a motivation to improve in your job because you want to feel good from your hard-earned money.
When talking about being motivated to improve with your job, another way of giving something to yourself is investing on learning a new skillset whether it is technical or soft skills. You can enroll in online crash courses, attend seminars and workshops or if you are really decided to take your career into the next level, considering acquiring a new bachelor’s degree or a master’s education.
Aside from getting financially stable, being knowledgeable on different fields will take you places. You never know when a skill will be needed and if you know how to do it, it will be a huge plus. You can easily seize opportunities to show off especially in your workplace. Chances are you will be seen as a skilled and knowledgeable person thus improving your image and increasing your chances of acquiring more career opportunities.
- Sharing your blessing with others
Overspending and fund allocation are easy tasks to make especially if you have something to spend or budget on. However, we often forget to help others especially those unfortunate. In fact, there are people who persevered in their studies and still get unlucky in terms of career opportunities. Even though we are resilient, it is like the odds are not in our favor so we do not have much opportunity to grow. So, why not be a blessing for someone? Why not open opportunities for them to grow? It does not necessarily mean that you should donate to charities or supply their needs. It can be in the form of aiding them through their finances or giving them gifts that will help them provide for their daily necessities. In that way, you give hope and inspire them to strive harder because you let them realize that there are people who understand their struggles despite that everyone has life problems to face.
Managing Your 13th Month Pay for a Long-Term Financial Stability
Having a huge inflow of cash is a rare opportunity especially for compensation-based earnings. With this, you can easily get tempted to spend it for yourself and overlook the chances of expanding your net worth. As understandable as it may seem, you should also decide when to invest more on your future by allocating a larger portion for things that will give a passive income.
Aside from interest on savings deposit and insurance policies, if the level of your savings reached the level where you can invest on something bigger, you should consider purchasing a real estate property. Bria Homes offers a lot of affordable house and lot and condominiums. Its financing term are flexible and you can choose whether to pay it through bank financing or Pag-IBIG housing loan. Your investment with Bria will surely not be put into waste as it envisions to build and sell properties in developing provinces which is very ideal for any investor who wants a high appreciation value on their properties. To know more about what Bria has to offer, you may check their website and visit their social media page.
Read: 3 Ways to widen your investment portfolio with Real Estate
