We all have gotten through a lot this year. From the Taal Volcano eruption to more than six months of quarantine, we can only hope for the best this holiday season. For those who had to undergo more crucial challenges of retrenchment, they take refuge from personal loans with low-interest rates in the Philippines. For most people who still have their jobs to treasure, this is an exciting time of the year to receive that extra cash called the Christmas bonus!
If you are one of the lucky ones to receive extra money in your pocket, don’t go spending it too quickly! There are smarter ways to spend your money and be financially prepared to face any financial crisis that will come your way.
13th-month pay vs Christmas bonus
Before you plan to splurge on Christmas shopping, let’s get this out of the way first. What’s the difference between your 13th-month pay and a Christmas bonus? The main distinction between the two is that 13th-month pay is mandatory by law for employers to give to non-managerial staff. Because you’ve been expecting this all year, chances are you already have plans for this extra month’s worth of salary. Meanwhile, the Christmas bonus is entirely up to the employer to give! It's a discretionary reward to employees depending on the company’s performance, the employee’s achievements, and the entire organization’s financial condition.
So what to do with this rather unexpected extra cash?
Essentials first - bills, taxes, debts
Hold your horses, folks. Before we proceed to freely spend your money, make sure you have enough to pay your rent, utility bills, and taxes. If you still have more debt to pay, it is but right to settle them all... You don’t want to start 2021 with debts, right?
Buy Christmas presents
If you’re a godparent, chances are your inaanaks will come knocking at your door any moment now. While some might prefer good old cash, there’s still a novelty in looking for a Christmas present you think is fit for them. You can do this in the comfort and safety of your home through online shopping!
If you’ve already accounted for all Christmas expenses in your 13th-month pay, then it’s time to spend smarter.
Boost your savings
Not having enough money saved is one of the realizations Filipinos had during the pandemic. Most of us realized how important it is to create an emergency fund or stash money in a savings account. This way, you can spend it elsewhere in the future. You can save to prepare for bigger purchases like a car or a house. You can also postpone our latter suggestions until you have more savings and more cash to risk and grow.
There are many ways to save money. It can be in a traditional savings account with interest rates at high as 2%, or if you’re trying to save for big future purchases, try a time deposit where your money gets locked in for some period, where you are discouraged to withdraw it or face penalties. Clever, right? If you want the freedom that comes with a traditional account, you can also check out digital banks that give up to a 4% interest rate on your savings!
Invest and watch it grow
Starting an investment is indeed that sweet spot between saving money and building a business. If you think the interest rates from fool-proof saving options may not be lucrative enough then opt for a conservative investment. So you just invest in stocks of someone else’s thriving business and get your money back (and more) when you sell.
When done right, an investment can prove to be a great way to make your money work for you. The journey may seem hard and complex for beginners, but with enough reading and practicing (yes you may lose some money), you can master the stock market and earn just from investing.
Start a business
This is a more high risk, high return way to spend and grow your money. Starting a business doesn’t earn you big money as quickly as we all might wish. It might take quite a long time to get back all your capital and earn a profit especially if you funded the venture with an online loan ph. Starters need to struggle through the complexities of trade and financing.
Using your Christmas bonus as a capital investment can provide you with peace of mind knowing you’re not bound to repay any online loans. You can certainly focus on the aspects of building a business that will require your patience and commitment. It will be a long hard road to profit and success, and if you’re not up for that, you might just waste your money. Now, no one wants that. But a safer option for your money will be to either save it for future use or invest it in other low-risk platforms.
Having extra cash in your pocket, no matter how small, can be overwhelming. Even if it's a bonus, you still don’t want to spend it thoughtlessly. Sometimes, it’s more important to plan how to spend the extra money, because it usually has the most potential for further growth or satisfaction. Opportunities like a 13th-month pay and Christmas bonus don't come regularly. You might as well spend it wisely by planning your purchases, investing a small amount of money, and even venturing into a small trade that could improve your finances.