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Smart Ways to Spend Your 13th-Month Pay

November 25th, 2021 | Share via:

The holiday season is upon us, and we all know what that means: the anticipated 13th-month pay is on its way. It's that time of year again, and holidays would undoubtedly be less enjoyable without a 13th-month salary. This financial benefit is mandated by law and is provided to all employees by their employers.The holiday season is upon us, and we all know what that means: the anticipated 13th-month pay is on its way. It's that time of year again, and holidays would undoubtedly be less enjoyable without a 13th-month salary. This financial benefit is mandated by law and is provided to all employees by their employers.


The pandemic, as one could imagine, would have altered our Christmas shopping practices. There will be no huge family gatherings, grand vacations, work Christmas parties, and gatherings for gift-giving this year. This Christmas, it's more of an emphasis on the essentials. This time of the year is a good chance to re-evaluate and revise how we spend our annual Christmas bonus.

Before you spend your money, think about what you need. Don't spend your 13th month's pay on things you won't need an avoid impulse purchases. Adulting is becoming honest with the expenses you have to pay, the goals you want to achieve, and the life ahead of you.

Use your 13th month pay wisely and effectively. Here are some helpful tips on how to spend your 13th month pay.

Smart Ways to Spend Your 13th Month Pay


Pay off your debts

Debt may completely ruin your Christmas plans. The ideal situation is to begin the new year with a clean bank statement that includes pleasant words such as "liability-free." Using your 13th-month salary to pay your debt is a wise and practical move.

Now is the ideal moment to pay off your debts, or at least reduce them. If you have unsettled credit card debt, pay it off before you consider indulging. Whether you're buying a house or a car, you can make payments ahead of schedule to make room for the coming year.

Begin by creating a list of your debts and categorizing them by importance. The highest-interest obligations should be paid first, followed by smaller–less-urgent–debts. There is nothing quite like waking up without financial worries. It's empowering and uplifting.

Start your own business

Use your 13th month pay as capital

You can use the money from your 13th month's salary to start your own business. Creating a small store or an online business, for example, is attainable with a small investment of money. You do not need a lot of capital to start an enterprise. Everything you need is to add determination and a commitment to the business, and you're ready to start!

Beginning a business may be frightening. However, entrepreneurs who are fortunate enough to establish successful small enterprises will enjoy significant advantages – perks that you will be missing out on if you stay solely as a wage worker for the remainder of your years. Additionally, owning a business allows you to be your boss and develop your decision-making and interpersonal communication abilities.

Start a small online delivery grocery store

Do you wish to have an additional source for your income? Then, beginning a grocery shopping business is a fantastic idea because it does not need a substantial initial investment and you may utilize your 13th month salary for it. Unlike many other sorts of small company ventures, the start-up cost for this one is modest. The most important investment is your time and energy.

The earning potential of an e-grocery shop is determined by the number of customers serviced and the amount of time committed to developing and expanding the business. Because you will primarily purchase what's already been ordered, the cost may not be too expensive. You don't have to use any of the official space to do business.

You will most likely invest in technology so that customers can quickly shop and purchase things online. Using your 13th-month salary to establish a small grocery business might be advantageous since you can make money while still having supplies for your daily requirements.

Get financially protected


Invest your money in an emergency fund

Another smart way to spend your 13th month pay is to put it as an additional emergency fund. Your emergency savings might assist you to avoid further to your borrowing with each financial setback. An emergency fund might help you pay for situations you don't plan for, such as auto repairs, medical expenses, and spontaneous travel.

Use your emergency money to deal with these stressful occurrences and help you accomplish reducing debt. When you have a buffer for unforeseen needs, it is simpler to immediately pay extra funds on the debt. Have an emergency investment until the plan is entirely funded. This would help you and your loved ones in case an unforeseeable event happens and you do not have immediate money you can get.

Protect yourself with insurance

Insurance is necessary for the same way that having an emergency fund is. It takes care of your commitments when they arise. Of course, you might also opt to enroll in an emergency insurance coverage that would protect you in times of need as an alternative. Some emergencies in life are not so much about if they will occur at all as they are about when they will happen in our lives.

You have no control over the people you will meet in the course of your life. Some natural occurrences take their path without intervention. Protect oneself against a variety of scenarios, including illness, incapacitation, injury, and death. You should also make every effort to retain your current status quo if your property is damaged for whatever reason.

Make sure that the insurance coverage you purchase is within your financial reach. If something occurs to you, think of your loved ones' well-being. That is where insurance comes in to ensure your continued existence. And if you already have an insurance coverage, you can use your 13th month's pay to cover this month’s charges.

Invest in healthcare coverage

How else can you properly care for yourself by safeguarding your mind and body? Aside from controlling your food and fitness, you may eventually reduce the external, monetary aspects of becoming sick or getting treatment. Whether there is a pandemic or not, engaging in health is critical because it is one of those things that you don't realize you need until it’s late.

Generally, most organizations should have a health professional who allows you to visit a doctor whenever you want without worrying about the cost. But if you don't, it's time to obtain one for yourself. Healthcare insurance comes in various forms and combinations, and you may select the one that best meets your needs. Paying hospital expenses is nearly as difficult for the typical worker as the cause for entering into one. Make sure you're insured to alleviate that added strain, especially while you still have the opportunity.

But, if the moment isn't right for more significant investments, you must at least go to that checkup you've been putting off. Now that you have the additional time and money this Christmas season, set aside part of it for a general checkup to be safe. Making sure you're all right on the inside is an excellent present to offer to yourself.

Nobody wants anything horrible to occur to you, but you're better off enjoying the Holiday season knowing that your health is in perfect condition.

Give something for yourself

Invest in your self-development

Investing in your self-growth means investing in yourself. You may utilize your 13th-month pay to develop yourself as you prepare for a greater life. Engaging in your improvement might include enrolling in a specialized course to further your personal development.

You may also buy books to expand your knowledge and understanding of various subjects. You can improve your skills in a required working field or education by participating in a seminar, training course, or conference. It will assist you in updating your portfolio together with your new set of skills or school. It will also broaden your options for increasing your income.

Allocate some money for yourself

Working and earning money can be a tough thing to do sometimes. When preparing for the future, it's crucial to remember that it shouldn't come at the price of your current self. You also need to enjoy the fruit of your labor and spend some money on yourself. You don't want to be missing out on the fun when you're reminiscing about your life with your friends and former co-workers at your reunions.

Once you've saved enough for your future self, reward yourself for a little something special now. Having separate accounts for your 'fun' money from your savings or retirement fund can help you keep track of it more easily. For all the hard work and the things you have endured over the year, you deserve to reward yourself. But not to the point of blowing your entire savings on a single purchase. Even so, you must maintain a sense of balance for your own sake.

Be a blessing for others

Improve your household appliances

Maintaining the stability of the home is always a top concern. Home appliances play an essential part in the family and should be functional and attractive in their design to fulfill their purpose. Home appliances that appear to be on their way out, such as discoloration, strange sounds, and failure to perform their functions properly, should be replaced immediately to avoid causing discomfort to the rest of the family members.

With all of the many advancements available on the market, it is critical to select the appliances that will best meet the demands of one's household. Also, keep an eye out for specials and promotions that may be available during the season, which may allow you to save money that you can use for other essentials. You may also buy appliances online for faster and more convenient transactions. AllHome is one of the stores that sells high-quality appliances.


Every day is another opportunity to share your blessings with others, even more so during Christmas. Whether it's through donating to a local charity or a cause close to your heart, never hesitate to share your blessing. This inspires the fundamental value of sharing prosperity with those in need and reminds you to appreciate the things you have, big or small. Additionally, it serves as an example of integrity and the fact that we should always build a longer table and not a bigger fence. Giving is always a pleasure, especially to those in greater need than some of us.


History of the 13th month pay

The 13th month pay was implemented under the time of the Philippines' former President Ferdinand Marcos. The 13th-month pay was initially optimized to address the problem of minimum wage of low-wage workers at the time in 1975 via Presidential Decree 851.

Back then, the 13th month pay was only given to employees earning less than Php 1,000 a month. However, this changed in 1986 when former President Corazon Aquino signed Memorandum Order 28 stating that all rank-and-file employees should be receiving the 13th month pay.

How to compute your 13th month pay

According to the law, the 13th-month computation cannot be lower than one-twelfth (1/12) of an employee's salary minimum income received over a fiscal year. All rank-and-file workers in the Philippines who worked at least one month throughout the applicable calendar year are administratively eligible to receive 13th-month pay from their company.

There are several ways to put your 13th-month pay to use. It is not only for buying gifts and other things that will be out of use in the long run. You can also use it for future benefits and life insurance for you and your loved ones.

Money isn't just an income; it's a vehicle that allows us to accomplish what we want, whether that's living a happy retirement or taking that trip you've always wanted to take.

When you get your 13th month's pay, don't spend it all at once. Budget for it, prepare for it, and, if possible, share it. It is critical to take action in deciding how to spend your bonus since it may be utilized to pave the way for a promising future for yourself and those around you.

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