THR Well Spent: Four Ways to Make Good Use of Your THR
The month of Ramadhan promises not only an opportunity to grow closer to God, or a chance to reflect deeper on one’s spirituality. For many, it also promises a sort of financial blessing in the form of a once-a-year holiday allowance, also known as THR, paid by employers to their employees.
Considered unique to Indonesia, THR is usually paid around two weeks before the big Eid al-Fitr day. This means by now most of you will have received the much-awaited holiday bonus the equivalent to your monthly salary. This can be quite hefty, and you might be wondering what to do with your valuable additional income in hand.
There are, of course, the usual holiday-related expenses that you can cover using your THR, such as paying the obligatory zakat-ul-fitr charity, or funding your family’s mudik (going back to one’s home town) trip, or even buying a new outfit for the big day. But what if you still have some of your THR left after paying for all those expenses? What do you do with the rest of it? Here are some ideas about ways to make good use of your THR that you can try.
1. Share happiness with that extra money
In the spirit of Ramadan, why not use that extra bit of money to spread kindness and share the blessing with those in need? Go to an orphanage and hold an iftar, a nightly meal breaking the Ramadan fast, for the kids to enjoy. You can also do this at a nursing home and bring a little happiness for the elderly. Another way to spend your THR in the way of kindness is to use it to pay for a school tuition fee for a child in need. Look around your neighborhood to see if you can find a child who can really benefit from such charity, or donate through the website of the National Movement for Foster Parents (GN-OTA). Some NGOs, such as SOS Children’s Villages Indonesia, also have foster care programs that you might want to look into.
2. Pay off your debts
Put your THR to good use this year and settle your debts. Freeing yourself from debts will prove to be useful for your financial goals. Prioritize on paying off the ones that have the highest interest rates, such as credit cards, which can have an interest rate of up to 36% annually.
3. Start a business
This year could be the year you realize that lifelong dream of owning a business. Your THR money can be quite a substantial starting capital to start a small business, like a restaurant or an online shop, or you can jump the bandwagon and join the recent craze of trendy coffee shops or hipster barber shops.
4. Support Indonesian small businesses
If you are not one to undertake the daily operation of a business, which, let’s face it, can be a daunting task, that does not mean you cannot still be a part of a business. With your THR, you can be an investor and help support small businesses with the funding they need. Did you know that micro and small businesses (UMKM) in Indonesia mostly lack access to bank loans? Peer-to-peer lending platforms such as Mekar provide a solution to this problem. You fund a small business loan through Mekar, help small businesses grow, and get an average return of 10% a year. This way, you gain a little bit of something while helping others. That’s a THR well spent.