1. Emergency Fund
Financial Experts usually advice people to have 6 months or more worth your salary in an emergency fund. Meaning, if your monthly salary is Php10,000 you should have minimum Php60,000 in your emergency fund which you can access easily in case of any emergencies such as hospitalization or loss of job. If you haven’t met the minimum amount that should be in your emergency fund yet, then putting your extra income in this category should be a priority. Emergencies can happen to anyone, anytime and it’s best to have a fund allocated to these unexpected events instead of using your hard earned savings that was initially meant for something else such as a dream vacation or perhaps a dream house or car.
2. Life & Health Insurance
This one is a must as well. If you haven’t got atleast one then I would highly recommend you to start availing one asap. There are alot of reliable life and health insurance providers out there and some of my favorites are Manulife & SunLife. Both companies have huge market capitalization so no need to worry about their financial stability. If it’s within your budget, I would suggest to get a life insurance with riders most importantly Critical Illness rider. Meaning if the Policy holder gets diagnosed with any kind of Critical Illness, the Policy holder gets a certain amount of money which can range from Php300,000-Php1,000,000 or even more. Let’s face it, nothing can prevent us from growing old no matter how healthy our lifestyle is and knowing that you will receive a fair amount from your insurance provider that you can use for treating your illness in case it comes is one way to be prepared. Trust me, I wish to live a healthy and happy life and die naturally at the age of 100, but in case I get diagnosed along the way, I know I’m prepared financially for my medication.
3. SAVE & Invest
If you’ve got number 1 & 2 covered, another great option on where to put your Christmas Bonus or 13th month pay (or both) is in investing. This one requires prior research as it involves risk. For starter, I would look into the Pag-ibig MP2 Savings Program which can earn 5-8% annually and has minimum holding period of 5 years. It’s much safer than investing in stock market or UITF since your savings are guaranteed by the government. The only thing that’s volatile is your earnings. I actually see the Pag-ibig MP2 Fund as almost risk free investment. Another options for investing are Mutual Funds, VUL, UITF or investing directly to your favorite company that’s available in Stock Market.
I like to spend a portion of my Christmas Bonus or 13th Month Pay to my family whether it’s booking a tropical vacation in Palawan or a winter vacation in Japan, hosting Noche Buena or simply buying them something that I know they have been wanting or needing but they haven’t got the time to get one. Anything that brings family and relatives together, money shouldn’t be a question.
One selfless option is giving. ‘Give’ is such a positive word however you apply it. You can give love, give donations, give groceries to less fortunate families, give free meals during Christmas day, give time by volunteering or give bonuses to Ates & Kuyas doing great job within your household. Whether it’s time or money, giving is a great way to spread the Christmas spirit and know that it will return to you 10x fold!
Where did your Christmas Bonus go last year? and where do you plan on spending it this year? Share your experience or plan below!