The coming weeks would scream of 13th month pay and other bonuses that a typical employee might get. I bet the moment the cash enters your ATM, you would readily withdraw the money and buy stuff that you would want or go shopping for the holidays. We cannot deny how excited we are with the upcoming festivities.
There’s really no hard rule on how to spend your 13th month pay. After all, you deserve this and you even worked hard for it. I just strongly suggest that you should not burn the entire amount. Instead set aside a portion of it and allocate it to one or two of these 13 ways below.
#1. Emergency fund. Your 13th month pay is a good building block to beef up your emergency fund. If you have not yet spared 6 months worth of your salary, then better allocate this extra payment. This is by far the best time to start putting in that much needed money.
#2. Pay debt. In case you still have debts, be it good or bad one, get a portion of your 13th month to clear those. Pay them off so you can start the next year debt free. Regardless if you can pay in full or not, the point is you are minimizing the amount you needed to pay in the future.
#3. Retirement fund. As an employee, there will come a time when we will retire. That is why, building up your retirement fund from your 13th month would be a good one. This is totally different from your emergency fund as this is more long-term. At least you can guarantee that the moment you retire apart from your pension you will still be getting more.
#4. Save. If you happen to have your emergency fund already and you still don’t know where to put in your 13th month, you can always set aside the money and get when you are ready. It is always a good idea that when something comes up be it an investment opportunity or what not, you already have that extra money allocation.
#5. Insurance. Trust me when I say that we all need insurance. We get insurance for our valuable items like our houses and cars, why not ourselves? Get a life insurance in order to cover yourself and your loved ones. There are many types of insurance. There’s even VUL that is both an investment and insurance.
#6. Invest. There are many investment options you can dip your money into. For instance, you can try stocks, mutual funds, UITFs and even real estate. The resources right now are bountiful. You can even easily open an investment account in your preferred bank. They have varied investment schemes that would be in line with your goals and personality.
#7. Business. Your 13th month can serve as capital for the business you have wanted to start. Slowly with that money, you can start on businesses that are cheap like buy and sell, offering a new product in the market and more. The possibilities are endless. You can even start your online business too that requires very low capital.
#8. Invest in yourself. This is very different from #6. This is a good act in case you still have money left after the basics. You can opt to buy books or perhaps enrol yourself in a short term course that is aligned with your future goals. There are also a lot of online courses that you can take that covers investments like stocks, forex and more.
#9. Tithes. Do not forget to set aside a percentage to give to your church and religious affiliation. For Catholics, 10% is ideal tithe money to be given to your church. I am most certain that this could help your church and its serving communities.
#10. Donate. The holiday is a good time to share our blessings. Hence, you can also set aside some portion of your 13th month pay to donate. You can donate it to government institutions and other organizations with a noble cause. You can even setup a soup kitchen or host a party for the street kids or kids in your neighbourhood.
#11. Time Deposit. Time deposit has way higher interest compared to savings account. This can also be a good option especially for conservative investors. If you think stock market and other aggressive investment is not your cup of tea, time deposit would be a safe alternative.
#12. Loved ones. Even if we are the one’s earning money and more so our 13th month, it doesn’t always have to be that the money will go to us. There are of course loved ones whom we can duly invest in. For instance, if you have kids you can always set aside your 13th month for their future and education. If you have your siblings, you can also do the same. For those who have their parents, you can always help fill up their retirement fund and medical fund.
#13. Treat yourself. After all the hard work you poured in for the entire year, you might want to somehow treat yourself. Get a portion of your 13th month to update perhaps your closet or upgrade your gadget. Just make sure that you are not using the entire pay just to do it. After all, you deserve it.
There are indeed many money smart ways to spend your 13th month pay. Discover such options as you can always mix the suggestions above. Remember, your 13th month pay only comes once a year. Hence maximize its use so that you will not only enjoy it for quite some time but rather for a long time.