Do you always find yourself in a “where did all my money go” situation? It’s Christmas and 2015 is about to end. Do you still have a little extra to welcome 2016 on a high note? Have you even paid your rent for this month?
Most condo renters can use a guide to maximize 13th month pay, especially when it comes to budgeting of single condo owners. Renters—who are mostly single, a couple, or a small family—think they can afford to spend more because they don’t have as many financial obligations as people who bought a property or people sending kids to school. But that doesn’t mean you shouldn’t subscribe to wisely spend your 13th month pay. Remember that you earned that for a whole year. Why waste it on something that you really don’t need?
For some of you who still have a significant fraction of their bonuses left, this article is for you. And for those who have nothing left, well, this is for you too, to give you some guidance next year.
Pay off debt
A 2014 online poll found that 57% would spend their 13th month pay and holiday bonuses to pay off debt. Do you owe anyone money? Do you have credit card debt? Paying them off is a one way to spend your 13th month pay wisely. Debt generates interest and before you know it, your debt has doubled or tripled. Only after you’re debt-free can you really boost your savings. Start the new year with a clean slate. There is nothing like welcoming a new year debt-free.
Pay rent in advance
There are expenses that cannot be compromised. Your monthly rent, for example. If you are looking to effectively maximize your 13th month pay and bonuses, pay your rent in advance. Rent eats up around one-third of your salary and truly presents a challenge in budgeting, particularly for single condo owners who do not have someone to split the rent with. Just imagine how much you can save up the next year if you can pay two months’ rent in advance. You can start a savings account or a travel fund.
Set aside savings
Saving your 13th month pay may seem like a daunting task. After all, there are parties to attend and gifts to give. But how about saving a portion of it? Financial experts suggest saving at least 10% of your income every month. If you are not able to do this over the past year, your 13the month pay is a good starting point. At least you have a little extra and you’ll find saving a little bit easier than usual.
Refill the pantry
Before you eye that latest smartphone, take a look at your kitchen cabinets and pantry. Food and groceries are major considerations in the budget for condo living. It would be nice if you can refill your pantry and also stock up on toiletries. These are the things that you buy every week and now that they are removed from the list, you have more flexibility in terms of spending.
Prioritize home repairs
You can’t put off repairing that plumbing leak any longer, and 2015 has come and gone. If you are renting a condo in the Philippines, your landlord may take care of some of the repairs as a result of natural wear and tear, but if the corrective measures that need to be done were caused by you, better address them as soon as you can.
Increase emergency budget
We know that emergencies are bound to happen but we take them for granted nonetheless. It is time to maximize your 13th month pay by increasing your emergency fund. Unexpected medical crisis, job loss, or even car repairs can empty your coffers. According to financial experts, emergency savings should represent nine months to one year of living expenses. Are you anywhere near that target? If not, it is best to start now.
Start an investment
You don’t need an actual business to have an investment. There are many to choose from such as mutual funds, investment trust funds, stocks, and shares. Savings and checking accounts have a 0.25% inflation rate, so whichever investment you decide to make you stand to win, depending of course on how much you know about the market and your own risk tolerance.
Get an insurance
If your company does not give health coverage, it’s time you get one for yourself. A medical emergency can dry up all your resources. Getting a health card also allows you to take annual physical exams, dental checkups, and consultations easily. With health insurance, you can take better care of yourself.
Getting a life insurance is also advised. Most life insurance programs also give you a chance to save up for retirement, so if you can afford those with your 13th month pay, that is definitely one good spend.
Earning from passion
Think long-term if you were to maximize your 13th month pay. What is it that you like doing in your condo during your spare time? Do you like to bake, make DIY crafts, or play music? It is time to turn your passion into a small business venture. Invest on a few baking equipment, DIY materials, and a set of instruments. You can venture into online selling or offer weekend music lessons to kids in the condominium.
Invest on yourself
One way to spend your 13th month pay wisely is by investing on yourself. Develop your skills by enrolling in short courses. There are also classes for your wellbeing such as dance and music classes. Your 13th month pay is easily drained but the skills you can learn will stay with you for a lifetime.
Take a vacation
There are a lot of non-working holidays during the Christmas season. This is the perfect time to take a break and recharge. An online survey by TripAdvisor showed that 33% are planning a Christmas travel this 2015. Remember that for a vacation to be truly satisfying, you don’t have to fly to the most expensive destinations. Just go some place where you can rest your weary mind. A staycation in some nice hotel would do.
Don’t forget your reward
It is nice to plan ahead and think long-term, but don’t forget to reward yourself. Of course, stay within a reasonable budget. You may want a brand new car but if you can’t afford it, don’t bet your whole year’s salary on it. To have an easier time managing savings and investments from your “fun” money, make sure you have separate accounts.
Pay it forward
What better way to spend your 13th month pay than donating to charity? Christmas is a season of love and giving. It would be nice if you can share a portion of it to your church or a charitable institution of your choice. Paying it forward is the best gift you can give your fellow man and to yourself.
Before you take that 13the month pay out of your pocket, think of the consequences, both short-term or long-term. If you’re living in a condo on a tight budget, go for something that lasts and will have a positive effect on your coffers. Do not decide on impulse only to regret it the next day. Your 13th month pay and bonuses come only once a year so make sure to spend it wisely.