13 Moneysmart Ways to Spend Your 13th Month Pay (2020)

13 Moneysmart Ways to Spend Your 13th Month Pay (2020)

There’s a ray of sunshine for employed Filipinos in this otherwise dark and difficult year ― the 13th month pay.

The Department of Labor and Employment have declared that all workers in the Philippines will be receiving their 13th month this year, even employees of distressed companies or companies that have folded up. They are mandated to give both final pay and 13th month pay on or before December 24.

Now before you log in to your favorite shopping websites or hit the malls for a well-deserved shopping spree, perhaps you’d want to check other smart ways you can spend your 13th month pay. Here are 13 great ideas that you can consider.

1 Pay off your debts

Debts can really cause sleepless nights and undue stress, especially if you have a significant amount of them. So why not reduce or fully pay them off with your 13th month pay?

Use the extra cash to pay off that personal loan, that credit card bill, or whichever high-interest debt that you can settle.

This way, you can end the year and welcome a new one either completely debt-free or one step closer to being debt-free. Nothing beats having peace of mind and a clean slate when it comes to finances.

2 Put it in savings

Yes, save it for a rainy day! We all know now just how important having a savings account is during a pandemic. Boost your savings account while you can because you don’t know what the future holds.

It’s comforting to know that you have savings to fall back on when something unexpected happens. With that said, you can also consider this next option.

3 Open an emergency fund

This is different from your savings account. You can tap into this pool of funds when you need extra money but don’t want to move money from your time deposit or high-interest savings accounts. The goal is to have emergency money that will help cover at least 6 months of your living expenses.

4 Invest in mutual funds or UITFs

You don’t need to be an expert to invest in UITFs or mutual funds. Depending on your investment goals and your risk appetite, there are many options you can choose to grow your 13th month pay. With as little as 1,000 PHP, you can already invest in UITFs.

5 Pay your insurance premiums

Whether you’re paying for your insurance premium on a monthly, quarterly, semi-annual, or annual basis, your 13th month pay can settle your premiums for the next few months, if not the whole year. That would be a great load off your finances, and you can also rest assured that you and your beneficiaries are protected.

6 Fund your small business

Have you always wanted to start your own small business but just don’t have the funds to get it started? Now your 13th month pay can be used for your business capital. So go open that food delivery or online business. Make that dream sari-sari store a reality.

7 Take a skills or self-development course

A wise (and rich) man named Warren Buffett once said that the best investment that you can make is in yourself. Your 13th month pay can go a long way in helping you learn a new skill or upgrade your current skills, whether for work or personal reasons. Enroll in that course or workshop that you have been wanting to take and get that certification. Whether it’s for a barista or photography course, or for a digital marketing or data analytics seminar, your bonus can help you pay for the entire thing!

8 Pay for home improvement

Go spend it for some home repairs before the damage gets even worse and your repair expenses get even more expensive. Get that roof fixed before the next typhoon rolls in, or have that bathroom leak sorted out before your whole second floor gets flooded.

9 Put it away for your children’s schooling

Enrollment for the next school year can be months away, but it’s never too early to start saving up for your children’s tuition. That’s a huge and major expense, and it can give you a little breathing space in your finances when you know that’s already taken care of.

10 Upgrade your work essentials

If you’re a freelancer working with a laptop that’s more than 5 years old, it’s the best time to get an upgrade. Improve your home office set-up to ensure work will run smoothly and tasks will be finished quickly.

Whether it’s a new computer, printer, air conditioning unit, or an upgraded internet connection, your 13th month pay can help you buy what you need. If you can afford to get the latest model with the best features and enhancements, you know you deserve it!

11 Donate to charity

For all the blessings that you’ve received this year despite the many tragedies and unexpected surprises, why not donate to charities or causes that you believe in? Pay it forward and help change someone’s life, even in your own little way. A small donation in cash or kind to your church, a hospital’s cancer ward, a homeless shelter, an old people’s home, or a children’s orphanage can make a big difference!

12 Invest in your health

Health is wealth, so spending your 13th month pay to protect your health is a good decision. Get life or health insurance coverage if you still don’t have one. Getting sick is not exactly cheap, so put your mind at ease and get health and medical coverage.

13 Experience something new

Can’t remember the last time you treated yourself because you’re too busy working to pay the bills? Buy something special for yourself ― you deserve it!

All work and no play only gives you stress and burnout. So set aside a portion of your 13th month pay for fun and relaxation.

It’s good to save money and not spend everything on a whim. But if you have some savings and investments in place, it’s alright to enjoy the present and spoil yourself from time to time, too.


What are you planning to do with your 13th month pay? We’d love to hear from you!