How to spend your 13th month pay

Christmas is coming and that means our most awaited 13th month pay is on its way to our pockets!

Do you already have plans on how you will spend your 13th month pay?

Are you planning to spend it on your vacation this coming Christmas break? Are you buying those nice shoes you've always wanted? Or maybe buy gifts for your family and friends? Or investing it on stocks instead?

Or just like most people, you don't have any idea yet where you are going to put and spend your 13th month pay?

The Best Way To Spend Your 13th Month Pay

Are you really going to spend your 13th month pay on a vacation? Go ahead!

Buying those nice shoes? Buy it!

Buying gifts for family and friends? Do it, they will appreciate it much!

Planning to invest in stocks? By all means, invest that bucks!




Actually, the best way to spend your 13th month pay depends on you. Yes, it depends on how you want to spend it. Because it's your money after all.

Maybe buying a new pair of shoes is not the best idea for others but for you it means happiness, it will bring you joy and satisfaction.

Maybe going out on a vacation means luxury to other people but for you, it means freedom, freedom from all the stress you accumulated from work and personal life for the past 11 months of the year.

Spend your 13th month pay based on your priorities and what you want to feel after spending it.

If the feeling of satisfaction of buying those shoes over the feeling of getting out of credit card debt is more appealing to you then go, buy those shoes! You can pay your credit card debt later on.

Spending your 13th month pay is a personal finance thing. And personal finance is personal after all, it varies from person to person. We all have different priorities and different financial situations. Spend your hard-earned money the way you want it based on your priorities and circumstances.


7 Best Things To Do With Your 13th Month Pay (if you don't have any plans yet)

If you're not so sure yet what you are going to do with your 13th month pay, I made a list of the best (and smart) options below.

  1. Pay off Your Debt
  2. Start a Business
  3. Invest in Stocks or Mutual Funds
  4. Invest in Yourself
  5. Buy Life Insurance
  6. Save Your Money
  7. Donate





1. Pay Off Your Debt

If you have debt that is long due maybe its time for you to pay it off. If you cannot pay it in full at least pay it partially so you can get out of it little by little. 

Having debt is not bad at all, in fact, it is essential in a business context. They call it "leverage", using other's money or resources as a lever or means of carrying out the business. But if the debt is purely personal or has nothing to do with business, I really suggest that you avoid it if you can.

And again, debt should be paid whether incurred for personal or business purposes. It's a headache if from time to time your creditor is calling for you to pay your debt (and he/she has the right to do so).

So if the feeling of being debt-free is more important to you, then go use your 13th month pay to pay off your debt.

2. Start A Business

Starting a business does not imply getting a lot of money out of your pocket. 

You can start a business of your own with just a small capital. The term "business" does not only mean having a coffee shop, restaurant, apartment for rent, or running a multi-million company. 

Having a simple food stall in front of a school is a business. Selling turon, fishball, and other kakanin, is in fact, a business. You just need to be creative and give your business ideas a try.

We are now living in the digital age

The internet is changing the landscape of the business world. There are a lot of opportunities online that you can engage in. This is another business path you can take. 

And it does not require a lot of capital to set up, in fact, it is by far the cheapest business model of today. Because you know, you get rid of utilities, space requirements and other things a typical business needs. 




You can try selling products online thru facebook or by having your own website. You can also sell your services there, offer your expertise and build a business out of it. The possibilities are endless!

As in my case, I am using this website and my facebook page to offer my services as a financial advisor from Pru Life UK.

Just remember that you don't need to start big. Start small, take those baby steps and scale up afterward.

Your 13th month pay is enough to start your own business. You can do it!

3. Invest in Stocks or Mutual Funds

Another smart thing you can do with your 13th month pay is to invest it in stocks or in mutual funds. 

Investing is important if you want to be financially well. 

It's like having an extra arm working and earning money. Investing is making your money work for you.

Just like riding a kayak, it's a lot easier (and faster) to reach your destination if you have another person paddling along with you. 

But before you invest in stocks, mutual funds, and other financial instruments, it is important to educate yourself first.

Stocks are very volatile, some days are good some days are bad. At one time you earn much then the other time you lose much. You have to understand that all investment and businesses (even big companies like Facebook and Apple) have an inherent risk of financial losses.  

No investment is guaranteed.




But don't worry or be scared, although no investment is guaranteed you can always choose to invest in strong or blue-chip companies (Facebook and Apple are blue-chip companies). These companies (although also posses inherent risks) are very unlikely to suffer financial losses in the long run. 

Example of blue-chip companies in the Philippines are:
  • San Miguel Corporation
  • Ayala Land
  • PLDT
  • Globe Telecom
Investing your 13th month pay is a good choice. Investing in stocks and mutual funds is very affordable nowadays. You can actually start investing in stocks for only 5,000 pesos. 

You can also invest in stocks and mutual funds by buying a VUL products. Check this sample computation for Pru Life UK VUL.

4. Invest in Yourself

Investing in oneself is very important but often missed by a lot of people.

The world is constantly changing.

What you know now may not be applicable for the coming years. Your knowledge and expertise should cope up with the changing requirement of today's workplace. So it's a good idea to use your 13th month pay to learn new skills and expertise.

Attend seminars, buy books, enroll in classes.

And besides, added skills are added credentials and probable reasons for promotion and salary increase.

The AI technology is moving so fast that Forbes predicts that by 2030 these 13 jobs will be automated. That means people will eventually lose these jobs, and that is scary. We don't know for sure if that will actually happen (I personally doubt it), but it's better to have backup skills to offer to the workplace if ever AI grab those jobs.

You can also use your 13th month pay to learn more about personal finance and entrepreneurship. There are many seminars you can attend to regarding these topics. There are the seminars of  Bo Sanchez, Randell Tiongson and others. You can also buy books on these topics.

Widening your horizons on personal finance and entrepreneurship is your key to financial wellness. Spending your 13th month pay for these is a very very very good idea. Your future self will thank you for this.




You can also invest in yourself by learning new hobbies like learning to play musical instruments, learn to draw and paint, learn to write good essays and stories, and so much more.

There are plenty of workshops for that.

Or instead, you can use your 13th month pay to attend seminars about personal development and health. If you are scared of public speaking then buy that book of Dale Carnegie. If you mess with your essays, then sign up for writing workshops.

As for health, investing in it is the best investment of all.

Because health is paramount to success.

There are fewer things you can do and achieve if you are in bad shape. So spending your 13th month pay for your general health check-up and other health related matters is a very good idea. 

5. Buy Life Insurance

Another sensible thing to do with your 13th month pay is to buy life insurance.

Imagine this, if you are a breadwinner and something happens to you, how will your family survive?

Life insurance is love in action

That if ever something happens to you, you have peace of mind that your family will not suffer financially, even if you cannot provide for them anymore.

I'd like to quote Bo Sanchez, he said;
The purpose of insurance is simple; if God calls you home today, your kids won't go hungry
Life insurance nowadays can also cover you from critical illnesses at the same time. So that if ever, God forbid, you are diagnosed with a critical illness, you will receive a sum of money to cover for the expenses of your medication and recovery.

You will need not to desperately sell your properties at a loss to have immediate cash for your medication. Your family will need not to incur massive debt to pay for your medical bills. And sadly but true, you will need not to beg to your relatives and friends for help.

Let's face it.

When life is hard friends are few. It is not always the case but most often it's true.

Sometimes your relatives don't really want to shy away from you but what else can they do? They are also struggling to make ends meet. It also breaks their heart the fact that they can't help you.

So if you can avoid those things to happen, why not use that 13th month pay to cover your health and protect your income, right?

Do you know that you can have a Life Cover, Critical Illness/Hospitalization Cover, and Investment at the same time? With one financial instrument?

[Check these 36 critical illnesses covered by Pru Life UK VUL]

Yes, you can have it by having a VUL life insurance.

Variable Unit-Linked life insurance is an insurance policy coupled with an investment component.

You can protect your income and grow your money at the same time.

[Check the minimum investment for Pru Life UK VUL]

6. Save Your Money

Warren Buffet said,
Do not save what is left after spending, but spend what is left after saving
This philosophy of Warren Buffet contributed to his fortune. According to Forbes, he is the 3rd richest person in the world with a net worth of $87.7 Billion pesos as of writing. Warren Buffet believes that in order to effectively save money, you need to do it before spending. This is to eliminate the chances of having not enough money to save at the end of the month.




But why saving is that important?

Saving is important because we don't know what the future holds. It enables us to be financially secure for the years to come. Money is not everything. But we need money all throughout our lifetime. We need money to accomplish our goals and plans. That is why saving money is important.

Here are some goals and plans that saving can achieve;

  • Building an Emergency Fund
  • Saving for Children's Education
  • Saving for Short Term and Long Term Goals
  • For Retirement

It is a good idea to use your 13th month pay to set up an emergency fund, or to increase it if you already have. Emergency Fund is your safety net in times of need. This is the immediate cash you can use if an emergency happens like losing a job and sudden sickness.

Education is the most precious legacy we can give to our children. If they finish school then they will have better chances of succeeding in life. That is why we will do everything we can to provide them the best education possible. But education, especially in college, is expensive. Tuition fees are higher each year. So saving money now so that we can secure our children's education in the future is the best preparation we can do.

We all have a dream, like driving our own car, having that nice house for our family, travel regularly and others. Those are Short-term (travel) and Long-term (car and house) goals. Really, if we don't have money now, what is the best way to achieve these goals and plans? That's where the importance of saving money comes in. Save money for your goals.

Retirement is where we are all heading to. And the thing is, we retire from work but the bills will still be there. When we don't have the sources of income anymore, we will rely on our children to survive the last days of our lives. What kind of retirement you get in the future will depend on how you prepare for it. Saving money as early as now will give you a comfortable retirement in the future. Read this scary literature about saving money.

Whatever your plans are, you will never go wrong saving money. So saving your 13th month pay for your life goals is a smart option.




7. Donate

You may consider donating a portion of your 13th month pay to church and charities. It can be a way of giving thanks for all the blessings you received this year.

By sharing your blessings, you are making an impact on the lives of other people. It does not matter whether it's a small amount of donation, what matters is the heart of giving. It is a way of showing you care for others, especially for the needy.

Anne Frank said;
No one has ever become poor by Giving 
The more you give, the more you are going to receive. Every time you share your blessing you are sowing a seed of abundance that you will reap in the future, by the grace of God. Because good deeds are being rewarded. But above all, give not to receive the reward, give because you care.

Here are some of the most famous quotes about giving;

We make a living by what we get, but we make a life by what we give. 
- Winston Churchill

Giving is not just about making a donation. It is about making a difference. 
- Kathy Calvin

It’s not how much we give, but how much love we put into giving. 
- Mother Teresa

I learned to give not because I have much, but because I know exactly how it feels to have nothing. 
- Anonymous

To do more for the world than the world does for you – that is success. 
- Henry Ford




Final Thoughts

Spending your 13th month pay is a personal thing.

It's your money and you should spend the way you want it. Remember that your 13th month pay is the fruit of your labor, so you have to enjoy it. Just be sure that you know your priorities and you will be happily satisfied with whatever you do with your money.

Just always ask yourself what you want to feel after spending it.

Maybe buying a new pair of shoes is not the best idea for others but for you it means happiness, it will bring you joy and satisfaction.

Maybe going out on a vacation means luxury to other people but for you, it means freedom, freedom from all the stress you accumulated from work and personal life for the past 11 months of the year.

I listed above the 7 best and smart things to do with your 13th month pay if ever you have no plans yet. These are;
  1. Pay off Your Debt
  2. Start a Business
  3. Invest in Stocks or Mutual Funds
  4. Invest in Yourself
  5. Buy Life Insurance
  6. Save Your Money
  7. Donate

I hope this post adds value for you on how to spend your 13th month pay.


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