Should you keep it in your bank account, take it out in cash and save it, invest it somewhere, use it for the batch, spend it on gifts for relatives?
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At these times, and no later than December 20 , you must receive your Christmas bonus . A little extra money does not fall badly, and it becomes even more important with the difficult situation that this pandemic has caused.
But what should you do with your Christmas bonus ? Should you keep it in your bank account, take it out in cash and save it, invest it somewhere, use it for the batch, spend it on gifts for relatives?
Here I will give you the most common uses, in addition to telling you which is your best option.
1. Use it to buy gifts
This is a very common use of the Christmas bonus, because then we don’t have much money saved, and in the end giving is better than receiving, right? Although it is a common destination of the Christmas bonus, it is not the best from the point of view of your finances, because if you are using your Christmas bonus to buy gifts, you should make a greater effort to save next year. You can try to get creative with your gifts instead of buying expensive gifts. Creativity and effort are often more valuable to your family and true friends. Why not make them a video with photos and videos of their experiences together? You can edit it on your phone, it’s free, and you can allocate your Christmas bonus for a purpose that makes you more profitable.
2. Remove it and store it at home
This is one of the worst purposes of your Christmas bonus, because not only is the money not going to pay off and it will lose value due to inflation, but you also run the risk of it being stolen or finding your hiding place.
3. Leave it in your bank account
It’s definitely better than withdrawing it in cash and storing it under the mattress, simply because it will be safer in the bank (believe it or not). Even in the unlikely event that the bank fails, your money is protected by the Institute for the Protection of Bank Savings (IPAB). However, leaving your Christmas bonus in the bank in an account that does not provide returns is not your best option either.
This is one of the worst purposes of your Christmas bonus is to put it under the mattress / Image: Depositphotos.com
4. Invest it
This is the second best option for your Christmas bonus (or the best option if you don’t have expensive debt). Investing it will allow you to generate returns and allow your money to work for you. There are many options to invest your Christmas bonus, even if it is not a significant amount. There are traditional options, such as CETES, bank promissory notes, debt funds or stocks (generally through a brokerage firm); Or you can also invest it in other options such as Fintech (such as prestadero.com, the company I run).
5. Advance the payment of expensive debts such as credit cards or personal loans
This is the best use of your Christmas bonus as long as you have personal loans, payroll loans and / or credit card debt. Many wonder if it is better to invest or save the Christmas bonus than to pay personal debts, and the answer is: of course not. But for you to believe me, I’m going to give you a simple example. Let us suppose the case of Juan and Mari. Both receive 10 thousand pesos bonus and have a debt of 20 thousand pesos on their credit card in which they are paying minimums. This credit card has a rate of 35% per year (this rate is even below the national average, in case you think I am exaggerating with the rate).
But Juan, thinking that he is making the right decision for his personal finances, decides to invest his Christmas bonus in CETES and continue paying minimums on his card. Mari, on the other hand, is a wiser person and has read this article, so she decides to use her Christmas bonus to lower her credit card balance rather than invest it.
After the first year, this is the situation for Juan and Mari, respectively: