It’s that time of the year once again, it’s not Christmas yet, but it sure feels like it. Every year, employees are excited about their Christmas Bonus. It’s a signal that Christmas is indeed around the corner. If you’re an employee, you can be assured that you will receive your Christmas bonus anytime soon. Or you might even have gotten it earlier!
The question is, what are you going to do with the money?
You probably have a list of things that you want to spend on. It could be a luxury bag that you’ve been setting your eyes on, or a new mobile phone.
An acquaintance of mine, let us call her Melody, is an example of this. She is an employee of a big BPO company. Every year, she would be very excited to receive her 13th month pay. She would buy all the things that she thought she needed, spending it on luxury bags or buy tickets in advance for a summer getaway. She would also spend some of it on clothes.
There is nothing wrong with spending on herself, she thought. She did work hard after all.
But, after I conducted a holistic financial planning with her, she said: “Wait, I need to save for my future!”
So how do we prepare for your future by maximising your Christmas bonus?
Here are some ideas on where you can spend your gift money.
1.Pay off debts.
This should be the first thing you do. You don’t want “na malunod sa utang” since the interest will pile up. For sure, makakain ng interest ang ipon mo.
2.Build up an emergency fund.
Difficult, but it is necessary. The emergency fund is a safety net for whatever life throws at you, unemployment, sickness and yes, a pandemic. Those who didn’t have an emergency fund knows how difficult it is nowadays in this time of a pandemic. Your emergency fund should equivalent to 6 months to 1 year of your monthly income.
3.Allocate funds for tuition fees.
I know school opening is 6 months away from now, but if you already have extra funds now, why not allocate money for it already so that you don’t need to worry about it after 6 months.
If you don’t have debt and was already able to build an emergency fund, you are now ready to avail a life insurance coverage. This will serve as your retirement plan as well. Since the Christmas bonus will always be there so long as you stay employed, you don’t need to worry about the annual premiums.
You will have peace of mind that if something happens to you, your family will receive a sum of money. You’re taking care of your family’s future needs while accumulating wealth for your retirement.
Getting health insurance is one way to protect yourself from a lot of stress when a member of the family or you get sick. You let the health insurance company pay off your hospital bills instead of withdrawing from your hard earned emergency fund.
6.Invest in UITF.
A Unit Investment Trust Fund (UITF) is a perfect investment for beginners. There are a lot of options depending on the type of risk you want to take, money market funds for the conservative or equity funds for the aggressive.
You can start investing with just a minimum amount of Php 5000.
7.Plan for retirement.
Planning for retiring at an early age is one of the most rewarding gifts you can give to yourself. It’s never too early to start planning for retirement. The sooner you start, the earlier you can retire. Don’t you love the idea of retiring at 55 or perhaps 50?
It’s never too early to start planning for retirement.
Invest in your peace of mind. Invest in your future. If you don’t know where to start, I can help you perceive your holistic financial status and provide you recommendations on what you should need to do with your financial future. Just send me an email at email@example.com.