Give yourself the gift that keeps on giving
Christmas is just around the corner! And around this time, employees like myself will be receiving their 13th month pay (and Christmas bonuses, for the more fortunate ones).
Which is quite timely, since we are better served having our money now so that we can use it to prepare for the holiday festivities. Even if we’ve already decorated our homes, there are still gifts to be bought. And food to be prepared for Noche Buena.
And isn’t it also timely how stores – as you’ve probably noticed – go on sale around this time too?
But then again, they are timely because they were planned to be. Employers know how much expenses are associated with the holidays. So they time the 13th month pay to be given just as it is needed.
And – as you’ve probably noticed – stores are always on sale around this time. And about every three months, actually. (Which happens to also coincide with the quarterly bonuses that are given by some employers to their employees.)
It’s not because they are always overstocked at these times. They planned to have a sale because when people have more money they are more relaxed with their spending. And when items are on sale, people are more ready to buy them. And should items be on sale when people have excess money…
Stores are betting that by lowering prices, they can make more profit at these times because of the sheer volume they will be able to sell. Which of course translates to a better future for their business.
But what about us? Our employers gain the benefit of attracting more skilled and talented employees by giving them a competitive compensation package (such as bonuses!). Stores become more profitable by giving discounts during big paydays. But what about us, how does the extra paycheck we get help us?
Certainly, it brings us luxuries we are not usually able to buy. And we can afford the new smartphone or tablet. And we finally have the cash to eat out at those expensive restaurants we’ve never been able to try.
But after that, then what? In most cases, we simply go back to our usual routines. And in a year’s time a new version of our gadget will come out. And we’ll probably learn about another expensive restaurant that serves great food. And when next Christmas comes around, we’ll have another big payday with which to enjoy them all.
But does that really help us the way it helps employers and stores?
I am not suggesting that we stop giving gifts, nor that we deprive ourselves during this festive season. But I would like to suggest an idea.
What if, we set aside a portion of that money? Let’s not even list what we’ll do with our money. Let’s just pay ourselves first and keep a portion of our money somewhere. And then we can spend the rest as we please.
And with the money we keep, we’ll gift ourselves with the gift that keeps on giving.
We can put it in a time deposit account and keep it there. If we rollover the interest, it will compound and over time we will have a substantial nest egg that we can use for more difficult times.
Alternatively, we can invest it in a mutual fund or UITF. If we invest in a bond fund, our money can grow much faster than they would in a time deposit account. Or we can invest it in an equity fund, which can potentially give even bigger returns, possibly 10% or more. By growing our money, we can someday have a substantial amount we can use for our retirement.
There are other options, but what I would like to point out is: before we spend our money to make us happy now, let’s think about how it can extend that happiness to our future.
Hopefully this post has helped you see how your bonus can buy you a brighter future. For more articles like this, please subscribe to my feed, like me on Facebook, circle me on Google+, or follow me Twitter @thePFApprentice. It’s free and you’ll be updated when a new article comes out.