It’s the most wonderful time of the year for a number of reasons but mostly because we’re all expecting our 13th-month paycheck (and bonuses if you’re lucky!). The worst thing you could possibly do is to splurge this much-anticipated hard-earned wealth on something trivial. You didn’t your butt off the entire year only to let capitalism win, did you? Here are smarter ways you can spend your 13th-month pay and year end bonus.
Make an investment or get health insurance
Probably one of the smartest things you can do with your sum of money is to invest it. If you don’t know how to start, r/phinvest on Reddit can tell you almost everything you need to know on investing in bonds, stocks, mutual funds, and more in the Philippines. It’s also a good place to start your financial literacy journey. If you’re not interested in investing, at least use your money to get health insurance for you and your family. It will give you peace of mind knowing you’re protected, whatever happens.
Put it in your savings
Raise your hand if you’re dreaming of retiring earlier than 65 years old. That would mean you would have to save money as early as now. Working without prioritizing your savings means you would have to be on the grind for the rest of your life — who wants that?
Stash it away in for an emergency fund
One of the most important lessons in 2020 is that the future is unpredictable. One minute we’re celebrating the start of the new year and the next we’re all locked up in our homes for the foreseeable future. Many people did not think they would lose their means of income this year or have a difficult time looking for a new job. So instead of splurging your 13th month pay on cravings, save it for a rainy day. When the going gets tough, you’ll be thankful that you have a safety net to fall back on.
Clear your debts
There’s no better feeling than knowing you’re debt-free. It’s like walking around without a hefty weight on your shoulders. Pay off your debts now before the interest rate buries you deeper. Trust us, holding off on buying that new gadget and choosing to pay debts instead is a much more fulfilling feeling.
Think ahead for 2021
What are your goals and dreams for the coming year? Is it to quit your current job and look for a new one? Then you’ll have to save your 13th month money to support you. Is it to finally go on vacation whether local or international? Then save your money and don’t touch it unless you absolutely need to. Thinking about your long-term goals can help you orient your spending.
Re-vamp your room
Spend it only for what you need
So you don’t want to invest your money or you’ve got all your debts paid (sana all), you can just go ahead and spend your 13th month pay on things you need. Keyword being need. If you must indulge in a little retail therapy, use your money to buy practical items you’ll use in the long run (that air fryer is looking mighty fine). Since year-end sales are everywhere, it’s an even smarter season to purchase your coveted items. But make sure to save at least 20% of your 13th month pay for your savings before you blow it out on useful stuff.
Treat your family
You could do a lot of things with your money — it’s yours after all — but probably one of the best things you can do is to give back. Spend money to treat your family to a year-end dinner or maybe buy them gifts for the Christmas season. It’s been a rough year and they’ve put up with your whining while working from home. They definitely deserve the treat.
How will you be spending your 13th-month pay?