What are the most common financial mistakes that people do with their 13th month pay and Christmas bonus?
The most common financial mistake is overspending and living like a one day millionaire. People think that their 13th month pay of Christmas bonus is extra money they can spend and splurge on to coincide with the holidays. This leads to bad money habits and inappropriate financial priorities.
To counter this, people should treat their 13th month pay or Christmas bonus as an extra boost to put their finances in order. It could be used to increase their emergency fund; purchase insurance coverage for protection, and further, accumulate investments that generate passive income.
It is important to put a balance in rewarding yourself and putting your 13th month pay or Christmas bonus to good use. As a personal rule, I spend half of my bonus to reward myself for the hard work done and the other half is saved or invested.
(Read also: 13th month pay and Christmas bonus tips)