We all know that Christmas is just around the corner. You know what else is? Your 13th-month bonus! Now, before you get too excited and check out the reviews of the latest gadget out in the market today, you might want to know how to spend your 13th-month pay wisely. It’s no easy task with all the influences out there. But knowing what millennials like you should invest in will spell the difference between a financially-stable future and living on a daily budget.
Without further ado, here are 8 wise things where you should spend your 13th-month pay.
Become debt free
We all know how much interest rates can hurt your budget. So before you think of even buying that smartphone or gaming laptop with your 13th-month pay, it’s highly recommended that you become debt-free first.
With the extra cash you get this holiday season, it might be a good idea to use some or all of it to get out of debt. Getting out of debt will help you get a good credit score with other financial institutions, which you might use in the future when you make big-time purchases such as a car or a house. Moreover, a positive score will allow banks to consider increasing your credit limit.
With what’s left of your bonus, you can now start thinking of ways to invest or increase your income.
Build your emergency funds
Imagine this: you’re working in a company that gives you a competitive salary, yet you use all of it every month on clothes, travel, food, the latest gadget, and bills. Nothing is left from your monthly salary because you spend it all.
What happens if you, for whatever reason, suddenly lose your job? How fast will your savings dry up?
It’s a scary thought, right? That’s why the BusinessMirror says having an emergency fund is a must. An emergency fund is money that you can pull out when your cash flow is disrupted by a loss of a job, health issues, accidents, and more.
Ideally, your emergency funds must be at least three months’ worth of your salary and must continuously grow. So set aside part of your 13th-month pay to start or build your emergency funds.
Get yourself insured
You never know when something bad may happen to you, so why not use part of your 13th-month pay to get an insurance policy? There are plenty of policies that range from as low as Php1,300 per month, depending on the package.
Look for a trusted insurance agent and have them run through the whole policy. Make sure you understand it as it can be tricky. Don’t be afraid to ask even the simplest of questions. If you must, get a lawyer to help you. Some agents forget to disclose some details and you might find yourself trapped in something you don’t want to pay for.
In addition, the beneficiaries of your insurance aren’t limited to just you. This can be extended to your spouse, children, and even parents or siblings. So it’s always a good idea to get one as soon as you can.
Set big goals and open a savings account
Do you think wearing the latest fashion is a good way to spend your 13th-month pay? Set bigger goals and open a savings account. You can start saving up for things that matter in the long run like your own car, house, or even a small business. These big-ticket purchases are good investments for millennials and will surely take some time to save up for.
Don’t waste your money on temporary fulfillment by following the YOLO lifestyle. It’s time you take matters into your own hands and prepare for the future now.
Invest in the stock market
A good way to spend your 13th-month pay is by investing in the stock market. You get to grow your money as you inject your hard-earned money in booming businesses. You can opt to day trade or go the long route and let your funds sit for a while until the stock market recovers.
It’s a little bit risky, but with the right tools and seminars, the millennials who invest in stocks will surely reap its rewards sooner than later. Maybe your profit will be more than enough to get you out of the corporate world.
Increase your income
Tired of your dead-end job? Do you want to become financially free? Why not use your 13th-month pay to start a small business and increase your income? It can be anything from monetizing your passion to learning a new craft and making a business out of it.
This is truly a wise investment using your 13th-month pay. It bridges the gap between your short-term and long-term goals. If it grows big enough, you can even go full time and resign from being an employee.
Income from your business can be used to cover your expenses, invest in the stock market, or even start another business. The possibilities are endless.
One of the best long-term investment advice for millennials that we can give is to spend their 13th-month pay for real estate. Sure, it adds on to the things you need to pay on a monthly basis, but there are many ways you can benefit from it.
First, you can use it as your own. Hate your daily commute? Then buy a condo near your workplace. Another way is to rent it out and earn. A lot of people who live in the outskirts of Manila would consider renting a condo to save money. Just make sure that the condo you buy is in the perfect location. Take a look at the many condominiums on the DMCI Homes leasing website for more information.
Don’t forget to give back
Are you happy with your 13th-month pay? Who wouldn’t be? It’s a much-deserved reward for working an entire year. Wouldn’t it be better if we all give back to the less fortunate? It can be as simple as treating someone out on the streets to a hot meal or go the distance and donate everything to a charity of your choice.
It’s always nice to share your blessings. If karma is to be followed, you’re sure to get even more good tidings in the near future when you make other people happy.
When you receive your 13th-month pay this year, think real hard about how you want to spend it. Do you want something to show off or play with this year or do you want to invest in something that can help you become financially free? It’s your choice, so choose wisely.