The 8 Dumbest Things You Could Do With Your 13th Month Bonus
Dec 3, 2019 • Cristina Morales
Dec 3, 2019 • Cristina Morales
If we’re being honest with ourselves, the most wonderful time of the year doesn’t really start until we’ve got our 13th month pay finally fattening up our payroll account. While it’s tempting to rush to the mall and go on a shopping spree, slow down. If you spend your Christmas bonus recklessly, you could end up empty-handed before you know it. Here are some of the worst things you could do with your 13th month pay, and what you should be doing instead.
Almost all of the following mistakes can be avoided if you have a solid strategy in place. Have a gameplan. If you have outstanding debt, use a significant chunk of your bonus (say, 80%) to pay it off, then do what you like with the 20%. Or you could save half of it and have fun with the other half. List down the items that you plan on buying to see what you’re working with. Once you start being more intentional with your money, you’ll be surprised by how much you’re able to stretch every centavo.
Running away from your debts won’t make them go away. In fact, it’ll only make them grow bigger. This is why the first thing you should do as soon as you get extra income is to get rid of any outstanding debt. The sooner you start paying it off, the less you’ll have to pay in interest later on. Which means that in the long run, you’ll have more money to spend on the fun stuff.
It’s perfectly fine to treat yourself every now and then, but it’s way too easy to go overboard. Instead of making it rain like there’s no tomorrow, come up with a strategy. For example, you could set aside 20% of your bonus so you can spend it on yourself, and save and invest the rest.
When you’re buying something, make sure that you’re getting your money’s worth. You might think that buying the cheapest version of something could save you some money, but sometimes, buying cheap could end up costing more in the long run because you’ll have to keep replacing them. Now that you have some extra cash to spare, why not invest in high-quality items that will last for years to come?
You probably already know why investing your money is an important part of your financial health, but when are you ever going to put this knowledge into practice? If investing in stocks is too intimidating, why not put your money into a retirement fund? The earlier you start investing, the better.
So you want to grow your wealth. Don’t make it rain on any investment opportunity that comes your way. Is your officemate bugging you to get in on their MLM gig? Or maybe an old classmate has emerged from who-knows-where to offer you the chance to invest in an “uhh-mazin” business opportunity. It’s your money, but remember: if it seems too good to be true, it probably is.
Life is unpredictable, so it’s important to have some funds set aside, just in case. Some experts say that the amount in your “rainy day” fund should be double your monthly salary, but this can vary from person to person. Basically, it should be able to give you some stability given your work situation and responsibilities. Though you can’t prepare for everything, by having some money set aside, you won’t be completely blind-sided by any unfortunate incidents.
Ever wanted to go backpacking in Europe? What about getting your own car? These big ticket items may seem out of your reach now, but saving money is the first step to reaching these goals. Do yourself a favor and give your savings account some love. You’ll thank yourself in the future.
What are you planning to do with your 13th month pay?
Though a chronic dabbler in whatever tickles her fancy, Cristina claims she can count her passions on one hand: feminism, literature, the environment, embroidery, and the power of a solid pop song. She lives in Uniqlo lounge pants and refuses to leave the house without a winged eye.
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