The end of the year is nigh. Many people across the globe are not only excited at the fact that they are closing yet another year but that there is a new one coming. Indeed, the end of the year and the beginning of another are events that need to be considered with seriousness. For business people and even employees, it is time to take account of your financial activities and draw conclusions.
What is the 13th month pay?
It is a monetary benefit given to every employee, as required by the Department of Labor and Employment (DOLE). This is equivalent to your 1-month basic salary.
Here are the top 10 productive things to do with your 13th-month pay, now that you are just about to get into the New Year.
1. Clear Your Debts
The 13h month pay is the best to use to pay off your debts. If you are in debt, make sure that you start your new year on a whole clean slate. Paying off your debts gives you financial freedom and the ability to think straight without the undue pressure debts come with. Pay off your debt and move to the next financial level. Debt is a known enemy of financial freedom. Now, you could be rolling your eyes and wondering, what if your debt is so much that it cannot be paid off once? To begin with, make a resolution to pay the debt within a given manageable time frame. If you cannot clear off the debt at once, pay it in whatever manageable bits, but to clear it as soon as possible.
2. Emergency Fund
Of course, the need to build our emergency fund cannot be overemphasized. Use your pay in the 13th month to complete your emergency fund build-up. The assumption here is that you already have one. If you don’t have it, then it’s time to set up one. Inject as much as you can into the kitty. Remember, emergencies arise when you least expect to spend. You are better off saving in an emergency kitty and withdrawing some amount after a certain period than not saving and being caught with no financial guard at all.
3. Secure Insurance
Just like an emergency fund is important, insurance caters to your obligations as you go. Of course, you could also choose to join an emergency insurance policy to cover you in times of distress. Some emergencies in life are not about whether they will happen at all, but when they will happen to us. You have no control over your future encounters in life. Some natural phenomena take their own course. Cover yourself against such possibilities as sickness, incapacitation, injury, or death. You should also seek to maintain your status quo in case your property is destroyed for some unforeseen reason. Make sure you choose insurance policies that fit into your budget. Mind the welfare of your loved ones in case something happens to you. That is where insurance guarantees your continuity.
4. Develop Yourself
It is important to keep evaluating your skills and the job you are doing with an aim to upscale. To make sure that you remain competitive and an unlikely target for such eventualities as retrenchment, you need to enhance your educational and professional skills. The world of knowledge is so broad that you can never know everything there is. Growing yourself does not need o to be an expensive endeavor. You could buy books in line with your career or profession. You could also enroll in online courses from reputed institutions. You could choose to attend workshops and seminars in your line of work too. The point is that you should use part of your 13th-month salary to build yourself.
5. The Stock market
You could also choose to invest in the stock market. This is a great venture for someone who is always well posted on the financial, political, and social developments on the world market. It is a great investment but needs a little bit of education on how to choose stocks, when to buy and when to sell. If you are getting worried about the education bit, fear not. Many online organizations provide stock market training for free. Nevertheless, if you feel as if the stock market is too rigorous for you, a mutual fund is an option worth considering.
6. Mutual Funds
Mutual funds have been around for over a century now. There is definitely a great reason they have outlived the challenges of time. Invest in mutual funds. You will not have to crack your head over the fine details. Mutual funds host in-house financial advisers who will advise and do everything for you. Mutual funds are affordable and accessible. You do not have to earn a big salary or whatever amount to join. You can join a mutual fund with amounts lower than $500.
7. Trust Fund
Investing in a Unit Investment Trust Fund is one of the wisest things you could possibly do with your 13th-month pay. The fund operates similarly as a mutual fund. The only difference is that UITF is managed by bank managers. Trust funds guarantee you financial freedom in projected and specified time frames in the future.
8. Consider a Startup
If you are not running your own business yet, consider starting one. Financial pundits will tell you that there is no true financial freedom in employment. It is time to stop living from month to month, with anxiety taking charge at the end of the month. Join a business club and learn the ropes. Consider technology-based businesses which require relatively minimal capital.
9. Save Your Money
The rules are simple, if you can’t find something productive to do with your 13th-month pay, you better just save it and continue doing it for the forthcoming year. Nothing beats saving. With some savings, you have lots of time to think and decide what to do with your money. You also accord yourself a level of financial freedom. If you fall into this category, we advise that you jot down some smart financial goals for the forthcoming year and start pursuing them when the year begins.
10. Go for Holiday or Something
the essence of working hard is to lead a good life. Remember all work, and no play makes you dull. Identify the fun things you love in your life. Spare some money at the end of the year and enjoy yourself. If it’s going on holiday, go for it, but remember to start planning for it with your 13th- month salary.
These are just some of the countless productive things you can do with your 13th-month pay. How will you use your bonus?