Are you itching to use your 13th-month pay before you actually receive it? Could it be for the latest smartphone, a gaming laptop, or that DMCI Homes condo you’ve been dreaming of? Whatever it is that you’re planning to buy with it, you first need to learn how to budget your 13th month pay so that you can make the most out of it.
To help you out, we listed a handful of things you should think of spending on first. This is followed by 5 holiday money-saving tips to try so you can budget your Christmas bonus wisely.
Get out of debt
Do you have some form of debt? It can be an automotive or housing loan, credit card bill, or anyone you owe money to. You do know that the longer you have a debt, the more the interest rate will hurt your budget, right?
So why not use the extra money you get this holiday season, aka your 13th-month pay? Not only will this help you get back on the positive side of your financial status, but it will also set you up for better monetary opportunities in the future. End this year debt free or at least cut off a huge chunk of it to ease the burden.
Build your emergency funds
Now that you’re debt-free, it should be time to start building your emergency funds by getting a certain percentage from your 13th-month pay or holiday bonus. Why? Well, you never know when your tenure in the office will end. It would be best to prepare for the financial void it will leave you when that time comes.
According to BPI, your emergency fund should be at least three to six months’ worth of your monthly salary. That should be enough to cover your monthly bills, transportation allowance, groceries, and other things until you find your next job (or career). But don’t stop at that, you can keep on setting aside a certain percentage of your income to continue increasing your threshold.
Save some for the future
Aside from your emergency funds, you need to save a little bit of your Christmas bonus for your future. Okay, half of what you receive should go to your savings, especially if you’re single. Learning this 13th-month pay budgeting tip is very important.
Having a strict diet in your savings will help you when the time comes to make a big purchase such as a house or a car, prepare for your wedding, or speed up your retirement goals. Don’t be fooled by the YOLO trend and spend it all in one go. It does sound too much now, but you’ll surely thank us in the future.
Protect yourself and your loved ones
If you’re thinking of how to spend your 13th-month pay wisely, this is one of the best ways to do it. Buy an insurance policy for yourself. Make sure that it’s flexible enough to withdraw funds in times of emergencies and that it covers your loved ones as well.
You never know when something will happen to you or when your time will come, so it would be best to have some sort of financial safety net for the people who are dear to you. Commit to your monthly or quarterly payments and you’ll surely reap the reward when your insurance matures.
Invest in the stock market
Now that you’ve built a solid foundation for your future with the above-mentioned tips, it’s time to start talking about how to increase your income. One way to do it is by investing in the stock market. Sure, it may be risky, but with the right help, you can make millions.
There are plenty of free seminars held by accredited stock market brokers and even the Philippine Stock Exchange for you to choose from. Attend this and, with your 13th-month pay (or part of it), you can start your path to becoming financially free.
With all that is done and dusted, it’s time to budget what’s left of your bonus and enjoy it.
List your priorities
When budgeting, you’ll first have to list your priorities. It’s not an easy task and the temptation of spending it on something else is real, especially with all the extra money you have for your Christmas bonus. Listing your priorities will help you allocate the funds correctly and wisely. This way, you’ll know what, when, and where you should spend your 13th-month pay on first.
Track your expenses
With all the money you have from your 13th-month pay, it’s easy to get carried away from your budget. To help you stay on track of your priority list, it would be best to note how you spend your money. Jot down everything from your daily commute, snacks, groceries, your night out with friends, and more.
Knowing how fast and where you spend your money will help you allocate your budget in the right places. It will also serve as a reminder on how you should be spending as the amount dwindles down. Moreover, it will teach you how to save for a holiday on a budget.
Be brave enough to trim your budget
During the holiday season, there will be moments when you’ll have to spend more than what you’ve prepared for like a cab ride home from a party or a sudden dinner out with friends. Don’t be afraid to adjust your budget accordingly. Adjust your budget for the succeeding days to cover whatever amount you’ve spent on the previous days. Yes, this means you’ll have to tighten your daily spending or skip on lunch/dinner outs.
Schedule when you’ll spend it
Just because you have the extra money this holiday season means you can spend it all in one day. We strongly suggest doing the following tips above and scheduling when to do or spend your holiday bonus. Don’t follow the YOLO mentality and be a one-day millionaire, instead, be a wise person who controls the way he/she spends their money.
Sharing is caring
How did you feel when you received your 13th-month pay? Bet you felt good to have the extra cash to buy what you want, celebrate Christmas with your family, and party with your friends using your holiday bonus.
Imagine what the less fortunate would feel like? Not to guilt trip you, but wouldn’t it be nice to give back? Spend some of it making someone who isn’t as blessed as you are.
There’s no doubt that receiving your 13th-month pay and Christmas bonus is a wonderful thing, regardless if you’re single or not. Remember, there’s a lot of potential to improve your financial status with the extra cash you get. Hopefully, these tips on how to budget your Christmas bonus will help you spend it wisely.