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I wrote this blog post which was originally published in Lifestyle Upgrade 101.

Admit it or not, if there is one thing that we anticipate come the BER months, it is our 13th month pay. Perhaps, you have already planned what you will do with the money as early as September.

Well, there is nothing wrong with financial planning. However, our 13th month pay is the hard-earned money that we have to spend wisely too. Below are some of the ways to spend it.

How to spend your 13th month pay 1) Pay off debt

The majority of the Filipinos have debts especially high-interest debts. With your money, pay all of your debts as you possibly can. Start with the debts with the highest interest rates and work your way to the debts with the lowest interest.

2) Start an emergency fund

If you haven’t already, now is the perfect time to set aside the money as an emergency fund. In fact, the emergency fund should be at least three times the amount of monthly household expenses.

3) Save for future expenses

If you are planning to make a big purchase in a six month’s time then, save ahead otherwise you might need to obtain another loan for that expense. Not such a good idea.

4) Purchase a policy

An insurance is one of the most overlooked ways to protect oneself. Compare life insurance products and decide which one is the best for your current condition particularly your age and health condition.

5) Start a retirement fund

An SSS survey claims that 98% of the Filipinos cannot support themselves when they hit their retirement. Thus, they have to depend on their children or the charities throughout the retirement years. Don’t be a part of the statistics by building your own retirement fund now.

6) Start a business

Even Warren Buffet, the investment guru, said that a person must not depend on a single income stream. It can be an online business wherein you only need a computer and a connection to keep it going. Whichever you choose, you can use your money to start a small business.

7) Open another savings account

Aside from your salary account, open a savings account that you will not withdraw money from. It would be better to open a non-ATM account. In this way, you won’t spend the money on temporary things.

8) Put in time deposit

Alternatively, you may consider putting the money in a time deposit safekeeping purposes. You cannot withdraw the money while it incurs interest.

9) Buy raw materials for DIY presents

What’s good about DIY presents is you can make them in bulk. You need not spend on lavish Christmas gifts particularly those the receivers won’t use anyway or will just stash in the display cabinet.

10) Invest in stocks

You’d only need Php5,000 to open a trading account. Most of the investment services provider conducts a risk profiling so you would know your risk tolerance.

True they say that you have to pay yourself first; this is what you have to do after 12 months of working hard. You may any of the listed above so you’d truly know where your money is going and not spend it on frivolities.

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