Manila, Philippines

Where to Put My Christmas Bonus? v2

How You Should Spend Your Loan... And How You Should Not
Sharing is caring:
Two years ago (how time flies), I wrote a similarly titled article
Recommendations back then were: SDA and Mutual Funds

Christmas Lights by Accretion Disc, on Flickr
Now here’s an update on the old article, plus some more suggestions.

BSP this year tightened its SDA facility to spur economic activity and consumer spending (aside from the fact that BSP is losing billions of money due to payment of interest earned by SDA). Among other things, banks increased account opening requirement (from old Php50k to now Php500k) and that individual customers are no longer allowed to participate unless via UITF. Which brings me to the next point below.
Mutual Funds
More of a clarification of the 2-year old article. Mutual funds are managed by fund companies / fund managers (not banks) whereas UITF basically works the same way but the latter is entrusted (hence the word trust fund) to banks (via their Trust Departments). But still, the concept is buying of funds via pooled investments. So if you’re more comfortable dealing with banks, then consider opening a UITF.
v2 Enhancements
Give and Share
Give to our less fortunate countrymen, those affected by the recent calamities, or those you see in the streets with no where to go (and probably not much to spend). Some people I know buy certain grocery items (ala relief packs) and give these to less fortunate people or those who have less in life. After all, with 11 months of investing in your ripples, you might want to dedicate the 12th month to investing in others.
Protect and Invest
Variable Life Insurance. I’d probably not get tired of advocating this to every Juan. This acts as protection and investment tool for you, rolled into one. This also gives you a multiplier effect, making sure that your one-off cash windfall goes a long way for you and your loved ones.
Pay-off Your Loans
Fully or partially pre-term your loans. I know this sounds so killjoy but hey, delay of gratification is always gratifying. And think about this. Imagine the interest savings you can get by pre-terminating your loans. Or the freed up money that used to be spent on amortizations.
With the Philippine economy still upbeat and consumer spending still positive, then now is a good time to engage in a small business. If you are ready with your 2 Ps (namely Product and Place), then your bonus can be your much awaited Puhunan.
It is always good to reward Juan self (no matter how small the reward is) so don’t forget to get a little something for you (and your loved ones) via your Christmas bonus. But hopefully, bulk of it goes to a certain investment, with lasting benefits, for you and/or for others, not just for the season, but in the years to come.

Photo:  Christmas Lights by  Accretion Disc 

Creative Commons Attribution 2.0 Generic License


 Filipino Personal Finance Investments For Filipinos

One Response

  1. employee says:

    As an employee, what I do is I do not allot my Xmas bonus for any big purchases so that I get to save it. Others, sadly, have already spent their Xmas bonus through advanced purchases as early as Jun or July. Tsk tsk.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Do NOT follow this link or you will be banned from the site!