What To Do With Your 13th Month Pay

Practical suggestions on spending it, saving it, and getting the most bang for your buck.

 If you plan to blow it all in one big purchase:

1. Take a trip.

Pick the best deals on flights and accommodation, so you’ll have more spending money when you get to your destination. “Book your flights and hotels in advance, and you’ll save about 30 to 40 percent off published rates.” says Renato Lirio, operations manager of Relitours Travel Agency. “Also, package tours will help you save more.” Sign up at cebupacificair.com to get alerts for regular seat sales and cheap bundled airfare and hotel packages.

2. Buy a swell laptop.

A laptop can help you get ahead professionally and personally. “Factor in ergonomics, connectivity, power management, size, and weight, and whether it’s future-proof,” advises Jason Kohrs, an IT engineer from New Jersey.

3. Reward yourself with a gift.

Now’s the time to get yourself that “I deserve it!” flat-screen TV or gadget you’ve always wanted. Look up items on sale and make sure you compare products of different brands, so you get the most out of what you’re paying for.

4. Tote a luxe purse.

Designer bags are a guilty pleasure for most women—aside from the chic craftsmanship, they make great arm candy, too. “These leather goods reek of sophistication, while the strict attention to detail justifies the high expense,” explains Mechele Pellebon, editor of fashion website mechellepellebon.com. Now, all you need to do is figure out how much you want one, and whether it’s really within your means.

If you plan to save 30 percent of your bonus...

5. You can spend on a gadget and a weekend getaway. Just don't forget to buy discounted items.

If you plan to save 50 percent of your bonus...

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6. You can spend for a new wardrobe. Remember to invest in year-round wardrobe staples that you can mix and match with the clothes you already own.

If you plan to save 75 percent of your bonus...

7. Spend for people on your Christmas list. "Shop before the rush, when goods are 20 to 50 percent cheaper," says Jimbo Gulle, former editor of Entrepreneur magazine.

If you plan to invest in your future...

8. Move your money around.

Instead of letting your money sit in the bank, invest in an insurance plan to keep you covered during emergencies. Or, you can try financial investments like mutual funds. “The key is to select the funds based on their investment policy and consistency in terms of returns,” says Hemant Rustagi, CEO of Wiseinvest Advisors. Approach a financial expert from your trusted bank to find out more.  

Pro tip: Take the stock market route.

Choose stocks with a good rep for staying afloat and providing returns to investors. Try colfinancial.com to connect with a stockbroker who can make your money grow.

9. Start your own business.

Use the money to put up your own enterprise, or at least, save up for capital. You can always approach investors or take out a loan from a bank if you’re set on pushing through with it even if the money you have isn’t enough. “Start your capital search with a good business plan that shows.

Pro tip: Get a franchise.

Taking on a franchise is an option worth considering for anyone who wants to run a business but doesn’t have a specific idea or prefers the security provided by an established concept. Find franchise opportunities on websites like entrepreneur.com.ph or inquire with the brand that you’re interested in.

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10. Buy your own place.

Now’s your chance to place a down payment on your own condo or apartment. But first, compute your budget for the monthly payments. “Your monthly amortization payments should not exceed 30 percent of your monthly income,” says Gary W. Eldred, author of Investing In Real Estate. 

Pro tip: Get your bank to help.

Apply for a housing loan with a low interest rate to supplement your bonus, so you won’t have to scramble for money when payments and fees are due.

This story originally appeared in Cosmopolitan magazine, November 2011. 

* Minor edits have been made by Cosmo.ph editors

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