How to spend 13th month pay wisely ABS-CBNnews Posted at 11/11/2013 12:39 PM | Updated as of 11/12/2013 10:36 AM MANILA, Philippines – It’s that time of year when employees across the country receive their “bonus”, or the mandatory 13th month pay. Suddenly awash with cash, the temptation to splurge will be very real as you consider the many things you can do with your windfall. Before you hit the stores, why not stop and think twice about how you can turn this one-time gain into long-term winnings? While it is important to enjoy this reward for all your hard work, at the end of the day, you may find that the latest mobile phone or that huge plasma television will not bring you the kind of financial security that an informed investment can. Surely you would not want to use up the entire amount on unnecessary expenses, so plan what to do with your bonus before you start spending. Think of what you really need and want to spend on. This could include events and other needs that might come up in the next few months – possibly a planned vacation or party, a wedding, school expenses, a major car check up or a health procedure. Then, list down how much each will cost you. This should help you come up with a priority list of expenditures. Using this, you can choose where to apportion the bulk of your bonus. Here are some more pointers on how to best use your bonus to your advantage. • Save. Start a seed fund for large expenses you have planned for the near future or recurring ones such as tuition payments or a vacation. Even better, use part of your bonus to start a savings fund that you can grow monthly. Consider time deposits or savings funds with special rates. It’s never too early (or too late for that matter) to begin your nest egg. • Pay off debt. You can also use your bonus to pare down your existing debt and save on interest expenses. Consider pre-paying loans such as balances you have accumulated on credit cards, or cash advances that you have made. However, there is no need to bring down your debt to zero, as it can also be healthy to use credit to your advantage. • Invest. There are many investment instruments tailored for retail investors such as mutual funds. If you are thinking of an investment in real estate, your bonus can go towards your downpayment. Before making investments, make sure to first study your personal financial profile vis-à-vis your wealth preservation and growth objectives. In other words, do not just put money into stocks or any instrument arbitrarily. Even if you think the amount you are investing is small, it is still a good idea to go through your financial profile and evaluate your options before making the move. • Invest in your skills. Consider using part of your bonus into developing some of your skills. If you think you’d like to hone your language skills, or you would like to learn painting, or even a sport, your bonus could help you pay off these courses. Although they may not show up in your resume or in your personal net worth, these intangible investments could reap rewards in a different way — by improving your well-being, expanding your horizons, and possibly opening new doors that would complement your present career now and in the future. • Pursue a small business venture. This is not for everyone, but for those who have already planned something out, have a business plan, and are just waiting for some capital to get the ball rolling. Perhaps, you’ve always wanted to start a small baking business but lack funds to start out. Your bonus could help you pursue your entrepreneurial bent. And of course, don’t forget to celebrate. It’s perfectly all right to treat yourself to something you have always wanted. Set aside a portion of your bonus for something that is purely for your enjoyment. Life is short and you do have to reward yourself. This way, you would not feel deprived and would get to enjoy your bonus, as you should. Lastly, why not share your blessings? There are a number of reputable charities that count on the generosity of Filipinos to be able to shelter, clothe and feed their beneficiaries. They would welcome whatever portion of your bonus you can share.
Posted on: Sun, 01 Dec 2013 12:36:23 +0000
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