Christmas is here! At this time of year, Filipinos may receive extra money in the form of Christmas bonuses or the 13th-month pay. This windfall may come at a fortuitous time with the economy opening up amidst easing restrictions due to the pandemic. However, before you give in to your shopping urges and find reasons to justify your expenses, you may want to know how you can maximize your extra money and make it last longer.
Here are some of the right money management approaches that will teach you how to spend your Christmas bonus wisely.
Wise money management tips in handling your Christmas bonus and 13th-month pay
1. Pay your debts
Wouldn’t it be a relief if you’ll be free from debt or pay some of it before the year ends? You can do that with your 13th-month pay.
Some people may not prioritize paying off their debts, but this will set you off to a good start. Use your year-end bonus to pay your debt or at least lower it. Before you think of splurging, check your status. Do you have unpaid credit card debt? Are there obligations that are pending payment? Settle them first and you’d be happy to use your extra money to be stress-free.
2. Invest in yourself
Keep in mind that your most important investment is yourself. It wouldn’t hurt if you’ll use a portion of your Christmas bonus to invest in your personal growth. Look for courses or seminars that can help enhance your knowledge and skills. Buy books that can refresh and improve your knowledge. Professional improvement will reflect on you as a person and could even open better career opportunities.
Another option is to secure yourself a life insurance plan. Investment-linked life insurance funds are available to maximize the benefits from your investment. With this type of insurance, you can make the most of your earning potential and start your journey towards financial freedom.
Some of the Sun Life investment options with VUL that you can explore include:
● Balanced fund - a combination of fixed income and stocks
● Bond fund - fixed-income investments that promise modest returns
● Captain's fund - invest in the leading companies in the country
● Money market fund - secure capital protection and grow short-term investments
● MyFuture fund - invest now to reach your financial goals on time
3. Build your emergency fund
One of the struggles for many employees is not having enough money to start an emergency fund. For an ordinary employee, saving isn’t that easy especially with the financial obligations that usually eat up one’s salary. An emergency fund will serve as your safety net that will protect you when life’s uncertainties strike. With the extra money you’ll receive from bonuses, you can already squeeze out a portion to start with it. Open a savings account and deposit your 13th-month pay or a part of it for starters. You can eventually top up your savings until you are able to save at least 3 months’ worth of your salary.
4. Explore investment opportunities
When it comes to investments, you’ll find a lot of options to start with. The good thing about investments is that opportunities are present for both beginners and seasoned investors. Choose from different types of funds such as mutual funds and money market funds. You can find the right investment for you whether you are a conservative, moderate, or an aggressive investor.
With Sun Life, you can secure your investment with the help of professional fund managers. Through them, you’ll have peace of mind knowing that your funds are managed well.
5. Prepare for Retirement
Think you’re too young to think of retirement? Not really. You can plan for your retirement at an early age. Consider it as a gift for yourself and for your family.
Research shows that 80% of Filipinos nearing retirement age are not financially prepared to deal with the financial cost of living beyond their employment years. Spare yourself from being in the same situation by investing early and planning your retirement carefully.
ALSO READ: How to spend and invest your Christmas bonus
The yearend bonus and 13th-month pay that you’ve been waiting for can vanish in the blink of an eye if you won’t be wise. Think hard and carefully decide on what to do with it. Lifestyle inflation happens when people who earn more tend to spend more. Keep in mind that while it’s not bad to treat yourself once in a while, you should also know how to properly manage the extra money you receive. Save and allocate funds now to start securing your future.