Workers in many countries receive the carrot of yearly bonuses to incite more productivity. However, some employers in some countries don’t have to worry about the expense because it is not mandatory, but not in Indonesia. In fact, the Indonesian business law has a particular name for the annual bonus, religious holiday allowance, or Tunjangan Hari Raya (THR) in Bahasa.
Under current Indonesian statutes, employees who have worked for a company for 12 months or more qualify for THR payment. Further, employers must honor the obligation no later than one week before the upcoming most extended religious holiday, usually Ramadan.
The THR payment enables families to afford the ceremonies of the occasion. Some people opt to prepare special delicacies, buy new clothes, or even throw a party for the family.
How To Properly Manage the THR Payment
The yearly bonus matters, especially during a recession. But the funds do not always have to go to niceties. Sometimes it is wise to use the allowance to build wealth. Here, we offer some strategies for adequately managing the allocation so that it lasts for longer.
1. Always start with a budget
A budget is a plan of action. It outlines all actions to be taken in order. Unfortunately, many people find budgeting boring, even stupid. They get sick of anticipating every move that a coin will take from their hands to the retailer’s counter.
Few people are great at budgeting, so you should not beat yourself too much if you suck at it. Thankfully, innovators around the country have developed various budgeting apps to help you with the task. The apps upend the notion of budgeting as painted in old-school personal finance books.
For example, ALIA leverages artificial intelligence to track users’ finances. The smartphone app personalizes budgeting and offers automated recommendations on spending and saving based on your financial history and targets.
2. Avoid the YOLO-style of leading life
YOLO or You Only Live Once is a popular slogan among young Indonesians. The problem is that living your life to the fullest extent is inherently risky. For example, YOLO-ists would rather spend all the THR allowance on payday than exercise prudence.
It is impossible to live life once, in the strictest sense of the term, while spending money sparingly. Nevertheless, you could adopt a more refined and mature definition of YOLO, whereby you commit to doing everything that needs to be done today. For instance, you could put some of the THR bonus in a savings account or use it to pay down outstanding debt.
3. Develop self-control
If you are a Christian, you might have come across Proverbs 25:28 that says, “A man without self-control is like a city broken into and left without walls.” It means persons who can subdue their passions are worthy of praise because it is difficult to do.
In light of personal finance, self-control means subduing the want to spend on big-ticket items because money is available. Many people make the mistake of overspending during holidays, primarily because of peer pressure. You are unlikely to yield to peer pressure if you have firm control over yourself.
Indonesians are very religious people, which makes the THR policy a godsend. The stipend brings as much joy as the occasion of assembling with fellow faithful in the presence of God. Nevertheless, nothing beats the power over the self. It means everything to be able to use money sparingly such that it doesn’t run out immediately. The kind of satisfaction that follows financial prudence is inexplicable.