How to Manage Your Festive Allowance (THR)

Getting towards the holiday, every employee is looking forward to have their annual festival allowance – or commonly known as “THR” in Indonesia. Yet, the long-awaited fund often lasts for merely a week or two. Is it normal?

First of all, you need to know the reason behind the “mystery” of your money disappearance. It is simply because of uncontrollable spending. The festive allowance equal to one-month salary looks abundant, which could trick you into thinking that you can spend it.

According to Rain, 37, she spent most of her THR for small items that have become her hobbies, such as kitchen tools and accessories, home decorations, and small gadgets.

Other than that, the festive season represents a new beginning –which encourage one to buy new things. Muslihin, 36, admits this. “For lebaran, I spent (most of) the money on new clothes,” he says.

The urge to spend your THR money also comes from emergency needs. Therefore, it is best to make a note of all spending that you made with the fund, i.e. making a list of people and the amount of money that you would allocate to buy gifts and hampers.

To get a clearer idea, follow these tips to make sure that you use your festive allowance in efficient ways:

Pay Down Your Debts

If you have debts, whether it is a loan to family or friends, or an instalment that you can pay off immediately, do not hesitate to set aside at least 15% of your festive allowance to pay down the debt.

“I would usually list down some debts that I need to pay off immediately. I would also set aside one third of the fund and use it to pay for my instalments in the upcoming months. It feels like you are not hurting your monthly salary,” Reggie, 39, shares his tips on paying off debts.

Also, since festive allowance is a company’s responsibility to their employees, make it your priority to give THR to your household assistance. Do not be absent-minded or late in fulfilling this responsibility.

Non-Negotiable Necessities

Holiday is time to gather with families and friends. The cost of getting people together is not free. Moreover, in Indonesia, friends and relatives from different circles are not possible to be invited at one occasion.

However, always differentiate between needs and wants. Your need to go back to your hometown, a.k.a. mudik, cannot be eliminated or reduced, because the fare is solely depending from the price of your transportation mode. In the contrary, you can still reduce the cost of attending break-fast events.

“During Ramadan, I spend more money than in any other months. In a week, I could attend several break-fasting events with different people,” says Wendy, an employee of a private company in Jakarta.

When the festive days come, Wendy often found her financials in a bad state. Therefore, she makes a calculation so that her needs will not be affected this year. One of her tips is not to reduce the number of gatherings, but to conduct a potluck event at her house or her friend’s.

Other than that, paying zakat is one of the non-negotiable items you need to include in your budget.

Flexible Expenses

There are some “routines” that would blow a hole in your budget. For example, traditions like buying new clothes, sending hampers, or giving a small amount of money to children cannot be abandoned, but you can reduce it.

“With a limited budget, I usually just buy one new item, like a kaftan dress or a blouse. Then, I would match it with my old hijab,” says Ani, who likes to wear feminine hijab.

Set Aside for Savings and Investment

Whether or not you have an investment, having a festive allowance would be the right time to build your investment portfolio. It can be as easy as setting aside 15% for this long-term goal. You can choose to invest in gold, mutual funds, or stocks.

Avoid Temptation to Use the Money

If you no longer have debts, you can put the rest of your thirteen salary into an emergency fund or a different saving account. By transferring your money to a different account, you will avoid the temptation to spend all your money in the main account.

“When something urgent comes up within the following months, the remaining fund from festive allowance will be very helpful, so it is a must to save some amount from this month,” Reggie says.

LiveOlive has prepared a budget template for THR that could help you plan the festive holiday better this year. The example is shown by the picture above. There are two given situations, for those who have debts and those are debt-free. You only need to fill in some columns (“FILL THIS COLUMN”) and the rest will automatically be calculated for you.

If you want to have this budget template, leave your email in our comment box.

Read also: Budgets Revealed of 3 Housewives

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