While the whole world wait for the upcoming holiday season with excitement, Filipino young professionals are twice as excited because it’s the time when holiday bonuses are released.
Many young professionals are, in a sense, “overnight millionares” because of the extra cash they get from their 13th month pay and Christmas bonuses. With so much cash to spend, would it be wise to apply the 20-80 rule on your bonuses? The short answer is yes. But if you want to be financially stable and free in the near future, here’s a better answer: if you can apply a 70-30 split rule, the better.
Why 70-30?
The 70-30 split is used in many aspect of life: businesses, sports, decision-making, and even art. The 70-30 split can help maximize your saving potential without heavily limiting your spending power. Save the 70% while you have 30% of your Christmas bonus to enjoy.
I know what you’re thinking: “30% of my Christmas bonus is TOO LITTLE for all the gifts I have to buy!” Don’t worry, I’m only encouraging you to use this on your bonuses. You still have your monthly salary which you can use for your spending. Your monthly salary + 30% of your holiday bonuses should give you a generous amount of money to spend for the holiday season.
Why do I have to save more on Christmas? I can do that next year!
I understand that you want to spend your bonuses lavishly because it’s Christmas. But such a huge bonus comes only ONCE A YEAR.
The sad reality is you’re exposed to economic downturns and calamity all year round, especially here in the Philippines. You won’t know when that 70% savings you set aside NOW will come in handy next year.
The habit of saving and investing
Saving and investing is not a hobby or pastime; it’s a lifestyle. For big spenders, growing the habit of saving can be a very painful development, but it can be very rewarding once they realize how important it is to set aside money now for the future.
How to grow the habit of spending
Growing a saving habit is difficult. You’ll spend lots of months being tempted to spend the money you get on things you want even when you don’t really need it. But all things start with small steps. Here are some tips to growing a spending habit:
• Have a budget and follow through with it
The money you earn is limited. Planning how you’ll spend your money is the best way to start your saving habit.
• Set a realistic financial goal you want to reach
Having a financial goal in mind that you want to reach will help you keep up a saving routine. Make sure that it’s a realistic goal with a clear timeline and has concrete actions that you can take.
• Start as early as now
There’s no better time to start a saving habit than now. Don’t put it off for another day because you’ll never start. If you’re really dedicated to having a financially free future, now is the best time to start.
