Christmas is near and so is 13th month pay. Some of you may already receive your Christmas bonus but what do you usually do with this windfall money? Extra cash is always flowing during these season especially those who are working in companies here in the Philippines where business are required to pay their employees a month’s worth of their salary. Some companies are very generous in giving bonus because aside from Christmas bonus they also give other kinds of bonuses to their employees such as mid-year bonus, performance bonus or 13th month pay.
Employees always look forward receiving their bonus but some drown themselves from debt even though they haven’t received their bonus money yet which is a bad way to manage or spend your bonus money. I usually plan ahead on how I will spend my 13th month pay or I just put it on the bank first whenever I can’t decide on how to spend it.
Here are some suggestion son how you should spend your salary bonus wisely.
- Tithe – every time I receive a large amount of money that is won, received unexpectedly or salary bonus I usually allot 10% for tithe.
- Pay off debts – extra money can help a lot in cutting a huge chunk off your debts. After giving 10% for tithe you can use the remaining money to pay off your debts rather than spending it on other things that unless it’s really necessary. It’s easier to sleep at night knowing that you are debt free.
- Pump up your Emergency Fund – If you don’t have any debt that you need to pay (kudos to you!) then this is the perfect time to build your emergency fund. Since you still have your salary, why not put the remaining 90% of your bonus to your emergency fund or allot 70% and spend the 20% for anything you want. What’s important is that you first put a portion of that extra money for your emergency fund.
- Retirement Fund – I believe that everyone should have a retirement fund. Starting your retirement fund as soon as you earn your first paycheck is a good idea. I wish this was taught in school when I was still studying because time is on your side when you start early.
- My want Fund – if you plan to travel, buy a car, buy your dream house, pay for children’s education, spend for wedding or buy any big-ticket item in the future, put a portion of your extra money on it in an investment account. This money can help lessen the big cost when you need it in the future. Plus you can also get a big discount when you buy these big-ticket items on cash.
- Share – What you put out into the universe will come back to you. If you have more than what you really need then why not share it to other people who needs it? You can share your extra money with the less fortunate people or community. You can start by donating to the victims of typhoon Yolanda (Haiyan).
If you ask me how I usually spend my bonus, after the tithe I usually pay any debt that I have, save part of it for my emergency fund and share it to my mom and our helpers.