Featured How to & Advice

What To Do With Your 13th Month Pay or Christmas Bonus

“Tara kain!”, “Uy, sale sa department store!”, “Samgyup tayo mga besh!”

Usually pag nagkakaroon tayo ng additional income eto yung mga naririnig natin.

Pero tama nga ba na dapat gamitin ang buong CHRISTMAS BONUS pang good time? Don’t get us wrong, it’s very important to also have a portion of your income spent on enjoying life. All of us work extremely hard to not only provide for our families, but to also live a quality lifestyle. However, how much spending is TOO MUCH?

If you’ve been watching our Personal Finance Series here on Investagrams, you may recall our first episode where we tackled the state of the Philippines in regards to financial literacy. To cut it short, we’re still a long way from where we need to be as a nation. In this article, we want to focus on a small way we can improve our finances — HANDLING YOUR 13TH MONTH PAY.

You may be wondering, “Why focus on the Christmas bonus?” You’re right, there are so many other aspects we can focus on. We can talk about saving tips, budgeting strategies, and much more. However, the reason we’re zeroing in on how to handle your Christmas bonus is because it’s non-recurring income; it’s something we only received once a year. It may only impact your finances by a small amount, but how you handle it can significantly affect your finances.

HOW TO HANDLE YOUR BONUS INCOME

1. PAY BACK ANY LOANS OR DEBTS

This may not be applicable for all, but if you owe the bank or other people some money then it may be best to hold back on your samgyupsal cravings for a while. Take this opportunity to use your additional income to pay off loans or debts to lighten the burden on your shoulders. On a side note, if it’s not related to any emergency at all, try your best to avoid borrowing money from other people, especially if it’s only to satisfy your wants.

2. GIVE BACK TO THE COMMUNITY

Christmas time has always been known as the season of giving. Donating to charities or simply doing a kind deed for someone in need can go a long way. You don’t have to give your entire bonus away, but even a small portion of it can significantly impact the life of someone who is less fortunate. It’s also just the right thing to do; humans are social beings, so helping out a fellow human should come naturally.

3. ADD IT TO YOUR EMERGENCY FUND

If you don’t have one yet, then now is the best time to start! Conventional wisdom says that you should have an emergency fund greater or equal to at the very least six months worth of salary. We know not everyone can set aside cash for an emergency fund given that we all have our own personal circumstances, but even setting aside half of your Christmas bonus can be a great start. Always remember, we will never know when a black swan event may happen so it’s best to always be prepared.

4. INSURANCE. INSURANCE. INSURANCE

In the context of black swan events, we will never know what may happen to us or any of our loved ones at any moment. As we’ve said, it’s best to always be prepared. You can use your Christmas bonus to begin investing in insurance. We won’t go deep into the different types of insurances since that would take up a whole article of its own, but as early as now you can start doing your own research to have a background on what insurance/s is best for your current situation in life.

5. MAKE YOUR MONEY WORK FOR YOU

How about instead of spending your whole Christmas bonus on shopping for new clothes or eating at all the trendy restaurants, why not make the money work for you instead? You can accomplish this by beginning your investing journey! You can learn how to invest in the stock market yourself, or invest in a mutual fund so that your money will be in the hands of professional fund managers who trade the markets for a living.

If you want to learn how the stock market works, you can check out this article: https://www.investagrams.com/daily/2017/09/start-investing-philippine-stock-market-step-step-guide-beginners/

6. INVEST IN YOURSELF

One of the best investments you can make is an investment in your personal development. No matter what you do in life, there’s always a way for you to improve. May it be in the form of training videos, seminar, or books, investing in yourself is always a great idea. If you’re a trader, one of the ways you can invest in yourself is getting the PRIME ADVANTAGE. If you want to take your trading to the next level, attain your most powerful trading partner in the form of the InvestaPrime+. Curious how it works? Check this out: Ano nga ba ang InvestaPrime at paano ito makakatulong sa iyo sa pag-iinvest?

CONCLUSION

Again, we’re not telling you not to spend your Christmas bonus or 13th-month pay on your wants. We’re just pointing out that you shouldn’t spend ALL OF IT on impulse splurges just because you suddenly received additional income. The importance of using your Christmas bonus wisely, aside from the benefits of doing the things we enumerated above, is it forms DISCIPLINE.

Since you only receive your Christmas bonus once a year, the discipline needed to spend it wisely is only needed whenever it arrives. However, if you can apply the same discipline in your day-to-day road to financial freedom, edi solid diba? Always remember, it’s not about how much you MAKE, it’s about how much you SPEND.


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