Metro Manila (CNN Philippines, December 17) – The stress brought to us this year by the pandemic tempts us to splurge this holiday season. But do we really have to spend everything in our 13th month pay and bonuses?
Personal finance expert and wealth coach Arnold Anog said that we can manage our finances this holiday through budgeting.
“Magpasalamat na may bonus pa tayong nakukuha,” Anog told CNN Philippines’ Newsroom Ngayon. “Unang-unang gawin ay disiplina, magkaroon ng sistema sa paghawak ng 13th month pay. Ang susi dito ay budgeting.”
[Translation: We should be thankful that we are still getting a bonus. First of all, we should be disciplined, have a system in handling our 13th month pay. The key here is budgeting.]
Even it is an extra money, Anog said that it should not be treated differently from the usual monthly salary. He noted that the 10-20-70 rule is also applicable to the 13th month pay and Christmas bonus.
According to the formula, 10% of monthly income should go to tithes or offerings to the Church; 20% to investments; and 70% is set aside for other expenses.
“Kahit bonus pa man yan, I don’t treat it differently,” he said. “Basta kapag may pumasok na pera, yung 10% balik agad kay Lord in the form of tithes. Yung 20% ayun yung itatabi namin para mai-invest, at pagkakasyahin yung gastos sa 70%.”
[Translation: Even though it is just a bonus, I don’t treat it differently. Whenever money comes in, the 10% goes back to the Lord in the form of tithes. The 20% is set aside for investment, and we fit other expenses within the 70%.]
Is it okay to reward myself?
Anog said it is okay to buy something for yourself, as long as you will not go beyond the 70% of your monthly income.
“Ang kailangan dito ay idisiplina ang sarili na kahit ano yan, pagkakasyahin mo dito,” he explained. “Dun sa pinasok mong 70%, dun mo din pagkakasyahin. Ang tanong, kakasya ba yan dun sa pinapangarap mong reward para sa sarili mo? Kailangan wag kang magpapatukso.”
[Translation: What you need here is to discipline yourself that you will stick with your budget. Within the 70%, you must not exceed beyond that. Ask yourself, is it enough to buy that thing you want for yourself? You must not be easily tempted.]
Credit cards and savings
Credit card might be a frightening thing for some, but Anog said that there is nothing to be afraid of if you have self-control in spending.
“Ang credit card, kung meron kang self-control, malaking bagay ‘yan,” he pointed out. “Magagamit mo ‘yan in case of emergency.”
[Translation: A credit card, if you have self-control, is a big help. You can use it in case of emergency.]
Anog stressed that your credit card debt must be lower than 20% of your income.
“See to it na hindi lumalagpas ng 20% ng kita mo yung pinambabayad mo sa credit card mo,” he said.
[Translation: See to it that your credit card debt must not be higher than the 20% of your income.]
Moreover, the wealth coach also advised that one could also invest in government or corporate bonds, aside from depositing in savings account.
“Wag tayong malimitahan sa banko,” Anog said. “Meron tayong mga bonds, government bonds or corporate bonds, mababa lang ang risks ng mga yan, pero ang layo ng kita sa bank niyan.”
[Translation: We should not be limited with banks. We have bonds, government bonds or corporate bonds, aside from depositing in savings account.]
A government bond is a form of security sold by the government to support government spending. Meanwhile, a corporate bond is a security issued by a company and sold to investors.
He said that interest in government and corporate bonds ranges from 3% to 5% per annum, as compared to .125% per annum when saving in banks.
New year
For those who want a fresh start in their finances for 2021, Anog said that everyone must review all their expenses in the past months.
“Ito yung panahon that you will review kung kumusta na ba yung pinagkakagastusan mo, mag-compute ka ng assets mo, tignan mo rin kung magkano na yung utang mo,” he said.
[Translation: This is the time that you will review what’s going on with your investments, you should compute your assets, and check how much is your debt.]
