13 Smart Ways to Use Your 13th Month Pay
Christmas is just around the corner and the year is about to unfold. For Filipino employees, ‘
Eliminate your debt
Start the new year with a clean slate by being debt-free — or at least, reduce most of your debts. Debt is one of the major roadblocks towards financial freedom. So if you owe anyone — family, friends, colleagues, credit card companies, etc. — it is now the best time to settle all your dues. You don’t have to pay it in full, but you can use your
Build an emergency fund
If you don’t have
If you are still undecided on where to allocate your
Set aside funds for future expenses
If you are anticipating some expenses for next year like insurance, real estate tax, tuition fee, home maintenance, etc., then now is the best time to set aside for those expenses as you have extra money. It is best to resolve these expenses sooner than later and taking preventive measures can actually help you save money in the future.
Invest in the future
There are different investments to choose from — unit investment trust fund (UITF), mutual funds, stock market, real estate — to name a few. The type of investment will depend on your risk appetite. Mutual fund is one of the affordable investments available. In mutual funds, a professional fund manager will help you grow your money. UITF, on the other hand, has a same concept as mutual funds but this is usually offered by banks and pooled funds are managed by banks and their fund managers. If you are into a more aggressive investment, they stocks might be the one for you. With just P5,000, you can already start investing in the stock market. But just a caveat, stock market is one of the most volatile investments out there and you must have a basic knowledge before you start.
Before you even start investing in any financial products out there, you must have a basic knowledge and arm yourself with enough information about these investments. Nowadays, there are a lot of books, seminars, internet articles that can help you to be more knowledgeable about investing. It is best to invest in knowledge first before you actually invest your money in any type of financial products.
Invest in items that will help you in the long run.
Getting a gadget or an appliance using your 13th month pay is not wrong. In fact, you can use these items for you to become more productive or can help you earn money on the side. If you are a content writer, blogger, web designer, visual artist, you can invest in a powerful laptop or a top notch smartphone that can help you hone your skills and do some freelance work wherever you are. If you have some love for cooking or baking, you can purchase an oven or some cooking appliance to help you earn extra money by selling food online or through your friends. If you love to take some photos, why not buy a camera or other photography gears which can help you to do some photography gigs.
Buying things is not bad as long as it can help you earn money or develop your skills more.
Invest in yourself
As what Warren Buffett said, the most important investment you can make is in yourself. You are your greatest asset so it definitely makes sense that you spend some of your money for your personal growth and career advancement. There are a lot of ways to do that. You can either buy books to enrich your mind, learn a language, take a certificate course, workshops, attend
Start a business
Another way to use your 13th month pay wisely is to start a small business. You can start your own business at a low cost especially with the help of technology and the presence of online marketing nowadays. You can make use of technology and start with a very minimal capital. You can have a buy and sell type of business or bake some cookies and pastries and sell it to your families and friends or sell gift items especially this Christmas — there are a lot of possibilities. Who knows? If you play your cards right, you might eventually find yourself traversing the road to financial freedom.
Give gratitude to your loved ones
As what the lyrics of The Jackson 5 song suggest — “Why don’t you give love on Christmas day. Oh even the man who has everything, would be so happy if you would bring Him love on Christmas day. No greater gift is there than love.”
Yes, why not? Filipinos are family-oriented and Christmas is one of the special occasions to express our gratitude to our loved ones. You can use your
There is nothing wrong
Plan for retirement
“Isn’t it too early to prepare for retirement?” you might say. However, it is always best to prepare your retirement as early as possible so when the actual retirement comes, you will be able to live comfortable, happy and not depending on your children.
The sad truth is that, Filipinos are not ready for retirement. According to a 2015 study conducted by The Global Aging Institute and Pru Life UK, 9 in 10 or 90% of Filipino workers “are very anxious about exhausting their savings, being in poor health, and having no one to care for them or being a burden on their children when they retire.” Moreover, the same study shows that only 68% of Filipino workers expect to receive Social Security System or Pag-IBIG Fund benefits when they retire, while 8% expect to receive income from financial assets like insurance, stocks, and bonds.
Retirement age is not a walk in the park so start planning as early as now for you to be a part of that 1 in 10. More importantly, planning for retirement at an early age is the most wonderful Christmas gift you can give to your present and future self as well as your family.
Get a life insurance
Another smart thing that you can do on your
Donate to charity
Since the essence of Christmas is about love and giving, this Yuletide season might be the perfect time to share your blessings through your 13th month pay. Giving to charity teaches you to be grateful and appreciate the things you have. You can either donate to a charity close to your heart, a local church or at a cause you strongly support.
You have worked hard for the entire year to receive your 13th month pay so it really pays to think carefully and decide on what to do with your bonus. Whatever decision you have made, make sure not to squander it or splurge on instant gratification. Be wise enough to budget it, plan it and share it if you can. The bottom line is to properly manage your money. Always keep in mind that what you do with your money today defines your financial future. Remember to save and invest for the future today so you will be financially successful tomorrow.