Managing THR to Improve Financial Health
This Eid will feel very different compared to Eid during the Pandemic. This year the government has officially revoked the policy for the Implementation of Restrictions on Community Activities or PPKM which was in effect during the pandemic. Currently, people’s mobility is no longer limited and it is possible to gather with family and return to their hometowns. In fact, the government has increased the number of collective leave days.
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Holidays are one of the long-awaited moments because we can gather together with our beloved family on holidays. On this occasion, the Holiday Allowance (THR) is also something to look forward to.
Even though you get additional income, you have to remember that expenses during Hari Raya will increase, starting from food, drinks, transportation costs for going home, clothing costs, or friendly visits and so on.
Managing THR with Financial Planning
From the start before Hari Raya arrives, you have to start doing financial planning by carefully calculating how much additional income you will get from Eid and how much you plan to spend. Careful financial planning can help reduce expenses.
Apart from meeting your needs during the holidays, THR can be used to meet other needs and can be invested.
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The following are tips that can be applied so that the THR obtained can be used optimally.
- Set aside for zakat
Especially for Muslims, before you consider the THR money management allocation for yourself, it would be a good idea for you to set aside a portion of the bonus for zakat.
Apart from being an obligation, by giving zakat, the money from your THR bonus can also be useful for others.
- Use it for holiday needs
During holidays, additional costs will arise apart from the costs of daily necessities such as costs for going home, sending parcels, meals and other needs. Avoid being impulsive when shopping and differentiate between wants and needs.
Apart from that, you can also allocate money from this THR bonus just in case other unexpected expenses arise before the holidays.
- Allocate to increase emergency funds
In the financial planning formula, the amount of emergency funds needed is three to six times the monthly income for those who are single and do not have dependents. Meanwhile, for those who are married or have dependents, the ideal emergency fund size is six to 12 times your monthly income.
If the value of your emergency fund savings is still below the ideal amount, then you can put the THR bonus money into an emergency fund post.
As the name suggests, you can only use an emergency fund in truly urgent situations. For example, when there is an emergency that causes you to lose your source of monthly income, at least the emergency fund can help you survive while looking for a new source of income.
As a reminder, place your emergency funds in financial instruments that are safe, liquid (easy to disburse), and easy to access.
- Plan your next Hari Raya expenses
What is always forgotten is to review Eid expenses every year. After knowing your Eid expenses, next year you can start preparing for next year’s holiday needs.
- Use it to pay insurance premiums in advance
A good financial planning strategy also needs to be equipped with insurance protection. As we know, insurance plays a role in protecting you and your family from various risks that might disrupt your financial condition.
Therefore, you can also consider budgeting the THR bonus money to pay insurance premiums. Generally, the insurance protection that is the main priority is health insurance, then life insurance. If you are protected by both, consider other insurance options such as investment insurance and pension fund insurance for a more secure future.
The Hari Raya allowance is more than just a windfall to meet consumer needs. With proper and wise financial planning, of course your THR money will provide benefits that can protect you in facing future risks.