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You just got your much-awaited 13th month pay. You’re happy and very much eager to spend it on some things you’ve been longing to do—or buy—a couple of months earlier.
But hold your horses! As with any other things in this world, money will also disappear and will simply go to waste if you don’t spend it wisely. Temptations abound during the holidays so it’s best to think of ways on how to use your precious 13th month pay efficiently and wisely. You don’t want to end up with an empty wallet right after receiving your bonus, don’t you?
The Philippine Association of Legitimate Service Contractors (PALSCON), the country’s biggest group of service contractors that have provided decent and quality work to many Filipinos, said many fall to their impulses, especially those who will get their 13th month pay the first time. “It’s all about a bit of planning, knowing priorities when it comes to spending. I’ve seen many of our employees who go excited of becoming a ‘one-day millionaire’ once they lay their hands on their money, then feel sad once all of it are gone and they’ll ask themselves ‘what happened there?’” explains Rhoda Caliwara, President of PALSCON.
So it’s really best to sit down and think of what to do first with your bonus while it’s not yet with you, says Caliwara. That way, you’ll have a clear mind of what to do and how to do it when it comes to spending your hard-earned money. In short, plan.
The first thing to do is save, using part of the bounty as part of a savings fund that can hopefully earn enough via time deposits or special investment funds. These funds can help through times when spending on things such as tuition fee payments for the kids or even for a possible business venture.
You can also minimize your debt profile by paying them off, Caliwara said, though not really paying all of it in one go. It’s best to pay it a bit so as not to accrue on interest. It works for those with credit cards who pare down their expenses and at the same time pay their interest on time.
Aside from a possible business venture for those who may have an entrepreneurial mindset, allocating part of the bonus for use in special investment instruments, real-estate or even a family or personal car can be options, but first check if going into these investment choices is feasible given your financial capabilities. Evaluate. Assess. Rethink.
You can even save some of your bonus to build up emergency funds for unforeseen circumstances such as medical emergencies, whether your own or a family member, house repairs after a storm or disaster, or even for fixing your car after a sudden breakdown. There can be lots of other things you can put your saved money to good use. As they say, you can never tell if and when an emergency happens so it’s best to be ready.
But most of all, don’t forget about yourself. You can save some as a personal treat after being hard at work for a year and spending countless hours toiling in labor. You can never be accused of being a spendthrift if you want to enjoy on some things and be pampered. Treat it as a reward so you won’t feel deprived, more of a “me” time when it comes to your hard-earned money. You definitely deserve it.
“At PALSCON, we encourage our members to teach their employees the basics of financial literacy. It’s hard to get a job these days and even harder to earn decent pay so teaching their employees about spending wisely, especially during the holidays, is a good way of showing we care for our employees’ welfare. They should learn to preserve their riches for anything that can happen in the future. It’s all about being prepared—and being wise,” explains Caliwara.