Things to Consider Before Spending Your 13th Cheque

Four Things to Consider Before Spending Your 13th Cheque

It’s coming up for the end of the year and after 365 days of toil, the temptation is there to take your 13th cheque or annual bonus (for those who are lucky enough to receive one) and spend it on some serious retail therapy.

As much as you deserve to be spoiled, there are far smarter ways to spend your 13th cheque and ones that aren’t necessarily going to deprive you of some much-needed, year-end pampering. Here are four things you should consider doing with your annual bonus before spending it on unnecessary luxuries...

1. Inject Funds Into Long-term Debt to Relieve Monthly Payments

If you’re paying off a car, house, or student loan, or have any other long-term debts sucking funds out of your account every month, consider paying off a chunk of it with your 13th cheque. Don’t be depressed by seeing your precious bonus disappear into the seemingly bottomless pit that is your long-term debt. By reducing the overall amount you owe, your monthly payments will be less, which means that you’ll have more money to play with every month.

2. Think About Investing

You’ve been working hard for your money all year. Now, with a decent sum of cash to play with, you should consider making your money work for you. Think about sinking a portion of your 13th cheque into some form of long-term investment vehicle, such as a top up retirement annuity or a tax-free savings account. If you’re willing to shoulder a little risk, you might even consider playing the stock markets!

3. Establish an Emergency Fund

Everyone should have at least three months’ worth of living expenses locked away in a “rainy day” savings account; if not, now’s the perfect time to do so. While you’re at it, set up a monthly debit order so that you continuously add to this emergency fund. You’ll be grateful for it when January – notoriously the most financially miserable month of the year swings around.

4. Treat Yourself!

Okay, so now you can treat yourself! You’ve certainly earned it and if you allow yourself a little luxury, you won’t feel as though you’ve been cheated out of your bonus.

Remember, being financially responsible might sound terribly boring, especially when the holiday season rolls around and you’re ready to kick back and enjoy some of your hard-earned cash. But, the luxury of receiving a bonus or a 13th cheque presents the opportunity to gain control of your financial situation and when you do that, you’ll have extra money to spend all year round, and not just in December.