The Truth About 13th Month Pay and other Bonuses

It’s already the last week of October and November is just a few days away. And what comes after November? Christmas, of course (that’s December). And what is it about Christmas season that every working soul is so keen of? You guessed it right, 13th month pay and other bonuses.

Back when I was a child, I really loved the idea that Christmas is just around the corner. I dunno, but from where we lived in Bulacan (I grew up in the ‘bukid’), months before Christmas, you can easily tell that it’s near because of the cool breeze of air during ‘Ber’ months.  So by the time December 25 comes, its like almost freezing in the morning. (that’s exaggerated, of course, hehe).

Back to my story. This is our usual routine on Christmas Day. Our family of 7 would get up very early. Then even without washing our faces, we’d quickly make rounds to our neighbors who are actually relatives at the same time. By 9am, we’ll then make rounds to our lolos and lolas and of course, along the way, we’d get to meet our titos and titas and get to collect gifts from them. As we do that, its like I’d wish everyday is Christmas day.

Until one day, it hit me. Fast forward. I was then working, earning a decent income from my salary. Here comes Christmas. If before, I’d get to collect my gifts, this time around, its completely the opposite. Pamangkins and even cousins (3 years and below) would fall in line asking for gifts. And because you wanna share your blessings, I’d be generous enough to give something. But the sad reality is that, come January of the coming year, most likely, I’d be broke and have to start all over again.

Later on, I got this analogy. We are given 13th month pay and other bonuses come December. But when you actually think of it, these are given to be given away. Get what I mean? And most of the time, we forget one of the most important person that we need to give something to. Any wild guess? Yes, the big answer is ‘US’. Not the United States but ‘us’, ‘we’, ‘ourselves’.

It took a lot of Christmas before I get to realize this. It actually hurts realizing that after the merry making, I’d have to work very hard again just to be broke at the end of each year. I was working for the present, not thinking of the future.

I made a simple calculation. If only I was able to save at least 20% of the bonuses that I received every Christmas, I’d have around Php50,000-100,000 extra cash – on top of my current investments. And this could have paid for my insurance policy, retirement plan or I could have invested the money in mutual funds and by now, it could be earning for me.

This Christmas, I have one simple advise to all who will read this. Once you receive your 13th month pay and bonuses, pay yourself first. Don’t dwell on material things like cellphones, psp, xbox or any. These are all liabilities that will eventually require more money from you. But instead, buy yourself something that can earn money like getting into mutual funds, insurance, retirement plan, pension plan or even educational plan for your children.

And I bet you, at the end of each year, if you do this,  by the time you retire, you’ll be surprised that you can still earn the same salary even without working anymore. In short, “the money is now the one working for you”, instead of “you  working for the money.”

Here are some investment options you can start by allotting part of your 13th month pay

Just in case you’re not the reader type and would want a personal discussion, just let me know and I might be able to help you.

Investing is not only for the Rich and Famous. Investing is for everybody.

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Garry Zaldy de Castro is an advocate, Financial Advisor, Certified Investment Solicitor (Mutual Fund Representative), blogger, IT practitioner, husband to Aileen and a dad to Jacob and JohnD. He started Financial Planning Philippines in 2008 just to share his financial learning to friends, relatives and anyone who wishes to be financially independent.


  1. According to Francisco Colayco, it helps to set aside some amount for your sinking fund monthly for future large expenses.  Instead of using your 13th month pay for your christmas give-aways, use your sinking fund.  This way, you get to save bigger chunk (if not 100%) of your bonus and still ejoy the season of giving 🙂 So no one time, big time spending right? This wont hurt your pocket as much 🙂

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