How to Spend Your 13th Month Pay Wisely

2023 is fast wrapping and we all know what that means! It's that time of the year when the workforce gets their highly anticipated 13th month pay.

One can easily get carried away by the holiday season and spend all that Christmas bonus splurging on the latest gadgets or showering loved ones with lavish gifts.

While it can be tempting to splurge all that 13th month pay after a year off hard work, it will be wise to remember that a year-end salary is also a chance to get a head start on your financial goals for 2024 or finally pay of that credit card bill.

The key is to avoid squandering all your 13th month pay and make a plan ahead to invest or put it towards future use.

Here are 5 ways to spend your 13th month wisely:


1. Pay off any lingering debt.


Do yourself a favor and end the year with peace of mind. By allowing yourself to become debt free, you will face the new year without worries. Getting rid of outstanding credit card bills or loans, especially high-interest debts, can give you that financial boost to help reach your goals the following year. Calculate your total debt and start clearing payments before you consider spending your 13th month pay.

2. Build your emergency fund.

You can use your 13th month pay wisely by choosing not to spend it and instead start a contingency fund. In case you have one already, you can beef it up periodically so that you have money set aside for a rainy day. Having a contingency fund on hand greatly helps tide over unexpected financial blows and racking up unnecessary debt. Ideally, your funds should have 3 to 6 months' worth of living expenses.

3. Start a Financial Investment.

Another smart way to spend your 13th month, assuming you are debt free, is to start an investment. If you already began investing, you can set aside money to diversify your portfolio.

For beginner investors, investments like stocks and mutual funds are excellent sources of passive income if you fund them consistently. Other good options to consider if you want to make an investment out of your 13th month pay would be:

• Mutual funds and Unit Investment Trust Funds (UITFs): For as low as 1,000 pesos, you may already begin investing un mutual funds or UITFs. You may choose to try both or one of these.
• Stocks: If you're up for a challenge with higher returns, putting your 13th month pay in stocks is a great way to spend your bonus and eventually become financially savvy. Because stocks are a high-risk, high-reward type of investment, you need to do your research first and make sure you know how the stock market works.
  
  
• Government-regulated Funds: PAG-IBIG and SSS funds can be considered low-risk, best for long-term investments that will help you fund your retirement plans. The SSS PESO Fund is available for SSS members who want to save more voluntarily on this provident fund program. For members of the Pag-IBIG Fund, there is a savings program called the Pag-IBIG MP2. Also eligible for this savings plan are pensioners and retirees who were once active Pag-IBIG Fund members. 

4. Invest in Real Estate Property.

We all aim to own our own home somewhere down the line. One of the best 13th month pay investments to make would be putting money in your first real estate property. Your 13th month pay might not be enough to pay off the entire purchase but it should be good to cover the downpayment or start a fund for this.

If you already started investing in a house or condominium unit, you can also start saving up for a property that you can lease to tenants or business owners. This will make a good source of passive income in the future.

5. Invest in Insurance.

One of the best financing and saving tips is to invest in insurance. This is one way to future-proof your retirement and make sure health-related concerns in your retirement won't drain all your hard-earned money from your employment years. You may now afford the following types of insurance in the Philippines with your 13th month pay. Options include: health insurance, life insurance, car insurance, and home insurance.

Prioritizing and planning how to spend your 13th month pay wisely will have its long-term rewards in the future. Instead of shopping or spending all your money at once on temporary happiness, try to focus more on important things in your life such as financial security and earning from investments.

Makati City

BGC | Fort Bonifacio

San Juan City and Mandaluyong City

Quezon City

South of Metro Manila

Other Cities

Buildings