You’ve probably planned on how to spend your 13th-month pay or your Christmas or year-end bonus even before it gets credited to your payroll account. But just because it’s a bonus it doesn’t mean you have to spend it all on a whim. If you’re serious about getting your finances in order, you can cut back on that shopping spree and spend the rest on two or more of the following:
- Pay off a debt or loan. First things first. If you have outstanding debts, use your extra money to pay them all off if possible. If it’s a credit card bill, settle the full balance. If you have an existing loan, pay what you can in advance. Remember: the sooner you settle your liabilities, the faster you can move on to bigger financial goals.
- Upgrade and enjoy long-term savings. There might be some big-ticket purchases you have been thinking of for the longest time. Is your old refrigerator conking out yet again? While it may be cheaper to have it repaired in the short term, it could be wiser to replace it with a new, energy-efficient model that would help lower your electricity bill in the foreseeable future.
Not sure if what you’re planning on buying is a smart upgrade? To help you better assess a would-be purchase, come up with an honest list of its long-term benefits. - Save and let your bonus work for you. If you don’t have debts to pay or any big-ticket items to purchase, good for you! Consider depositing the bulk of it in your bank account or keeping portions of it in a time deposit account. This “out of sight, out of mind” approach with your 13th-month pay helps you forget you have that bonus in the first place.
Not having the money on hand gives you time to think before spending it. At the same time, seeing the rise in numbers on your bank account will further motivate you to grow your nest egg or emergency fund.
It also doesn’t hurt to look beyond the present and think of all scenarios. Protect yourself and your loved ones by investing in financial solutions like variable universal life (VUL) insurance, which combines the perks of life insurance and investments an option that allows you to save up for your goals while being protected from uncertainties. A financial advisor can help you if wish to learn more about investing and getting insurance in the Philippines. - Start a side business. If there’s a sensible business idea brewing in your head for some time now, go ahead and use your extra money as capital. Not ready to quit your job just yet? Start small and test the waters first by doing it as a side hustle after work or on weekends.
- Set up an upkeep fund. You should anticipate the regular maintenance works or improvements that would normally put a dent in your yearly expenses. Instead of wincing when it’s time to take your car to the auto shop, or when you need to have your grease trap or aircon professionally cleaned, you’d be confident and at peace knowing you’ve set aside some cash expressly for these expenses. It’s similar to an emergency fund but with a more specific purpose.
- Invest in a better you. Sign up for a class you’ve always wanted to take or books that can broaden your outlook in life. According to Huffpost.com, “investing in yourself is one of the best returns on investment you can have.” It sends a message to yourself and the world about the importance you’re putting on your value and potential. Whether you want to learn a new skill or change your lifestyle for the better, go for it.
- Share it with others. Look into legitimate charitable institutions or non-profit organizations whose advocacies resonate with you the most. Spread the Christmas cheer—it’s the season of giving after all!
We hope you consider these ideas every time you expect a 13th-month pay, mid-year bonus, inheritance, or a commission from your passive source of income. Have a solid plan beforehand instead of just parking it on your spending account where it’s so easy to use it on little purchases here and there…and be gone before you know it.
Know you can game plan your future today with the right savings and investments plan for you. Contact an AXA financial advisor and learn more about protecting your assets, securing yourself from unexpected events, and getting an investment in the Philippines.
