Compound interest: discover how to calculate and use it to your advantage!
The 13th salary is eagerly awaited by many peoples who work with a formal contract. As it is extra money, it offers a range of possibilities, but requires financially well-directed decisions to maximize this additional resource effectively.
It is common for people to want to take advantage of this value to make dreams come true, pay off debts or even invest in search of future returns. On the other hand, there are mandatory expenses that arise at the beginning of the year, making planning more relevant.
For this reason, below you can find tips on how to use your 13th salary efficiently. Continue reading and check it out!
Pay off debts
Using your thirteenth salary to pay off debts can be a good strategy. By doing so, you eliminate the need to pay future interest, but it’s important to do careful planning before making this decision.
Initially, identify your debts and place them in order of priority. Consider interest rates, terms and their impact on your budget. The goal is to pay off the most onerous debts first or those that could generate the most impact — such as a bill that could lead to the cutting of services.
Then, consult the lender to negotiate the best conditions. Paying in cash can often result in considerable discounts. Another possibility is to try to consolidate several debts into one, with lower interest rates. This can be done through a loan with more favorable conditions.
In this process, a person may be in doubt between paying the largest amount of debt and not investing, or paying off less debt and allocating an amount to investments . Know that prioritizing debt is usually the best option. As their interest rates tend to be higher, the ideal is for them to be placed first.
Cover end-of-year expenses
Anyone who is entitled to the thirteenth does not need to use it just to pay off debts — covering end-of-year expenses is also a common practice. This time is usually full of additional expenses, such as gifts and parties, and the extra salary can be a relief in this scenario.
Before you start spending, the ideal is to make a detailed budget. List all expected expenses, from dinners to travel and gifts. The objective is to avoid surprises and unnecessary debts.
To help with this process, points programs tend to be an attractive benefit for credit card supporters. In general, they can be exchanged for benefits that help reduce expenses, such as cashback on your invoice.
However, it is worth remembering that there is no point in using a credit card thinking about the points, without observing your financial planning, as this could lead to new debts.
Organize personal finances
In addition to covering expenses, the 13th salary can be used to organize personal finances. This is usually a good way to go, as the secret to a balanced financial life throughout the year is effective planning.
To do this, you can keep a detailed record of your income and expenses in a spreadsheet or application. Then, set specific goals, such as reducing your water bill or saving 10% of your monthly income. This practice is vital to efficiently manage your resources.
The idea is to always have a positive balance, even if modest, to ensure financial security in the future. So if you don’t have urgent debts, the 13th salary can be used to anticipate future payments. This can generate discounts and free up your budget in subsequent months.
Extra money can also be used to improve skills. Investing in courses or certifications improves your professional profile and can bring long-term financial returns.
Therefore, using the 13th as an extra resource could be the key to financial balance. Just remember that this is a temporary feature while bills are recurring. The extra amount may be attractive, but it is not a permanent financial solution.
At the start of the year, pay your bills.
Another tip related to organizing your finances is to allocate your 13th salary to pay off bills from the beginning of the year. This measure prevents surprises and offers a smooth transition into the new financial period.
Expenses such as IPVA (Motor Vehicle Ownership Tax), IPTU (Urban Property and Territorial Tax) and school registration are common in the first months. For this reason, planning to use your 13th salary for these payments may result in discounts if the debts are paid off in cash.
To this end, make an inventory of the bills that are due at the beginning of the year and try to prioritize those with the highest value — or those that offer a discount for early payment. This way, it is possible to optimize the use of extra money.
If the 13th salary is not enough to cover all expenses, set priorities. Paying the IPVA may be more urgent if you depend on your car, for example. For families with school-age children, enrollment and teaching materials tend to be priorities.
Create an emergency reserve
If you have no debt and do not intend to spend on end-of-year purchases, an alternative that may be suitable is to start or feed your emergency fund. After all, unforeseen events can happen.
Counting on an extra amount for unexpected situations is a great choice and reduces the risk of debt. The ideal is to have a reserve equivalent to 6 months of your current cost of living.
Invest
After creating an emergency fund, you can use your 13th salary to make investments. This strategy not only preserves your money, but also helps you grow your wealth over the years. Leaving money idle tends to generate devaluation due to inflation — and not yield.
To invest, first define your financial goals. Whether short- or long-term goals, they guide the choice of the most appropriate investments. Shares, real estate funds and fixed income securities are some of the alternatives available.
Additionally, carry out a risk and return analysis. Make sure the investment you choose aligns with your investor profile. If you are more conservative, for example, you may prefer to invest in low-risk applications.
Remember to consider the taxes and fees involved. Each type of investment has its own tax structure, which can impact net income.
As you have seen, the 13th salary is an opportunity to adjust, strengthen or even transform your personal finances. A well-structured and planned use of this resource can help achieve financial stability, meet goals and make dreams come true. Whatever your choice, planning and information are your best allies.