5 Tips for Managing THR to Keep Your Finances Healthy After Eid

Dream - Many employees receive holiday allowance or THR before Eid al-Fitr. However, many of us are unable to save the THR for future needs.

Usually, the THR is used up for Eid needs, such as buying clothes and various other necessities that are usually queued before the holiday.

In fact, we can manage the THR well so that it can be beneficial in the future. We don't need to spend all of the THR so that after Eid, we experience financial difficulties.

Head of Research and Advisory at Bank Commonwealth, Thadly Chandra, recommends allocating the THR as 10-20-60-10.

Ten percent for paying zakat, 20 percent for savings and investments, 40 percent to 60 percent for Eid needs and paying off debt or installments, and then 10 percent for emergency funds. 

“With good management, the benefits of THR can be enjoyed not only during Eid, but also in the long term, even after the Eid celebration is over,” said Thadly in a press release, quoted on Friday, April 14, 2023.

So, how can we manage THR wisely to keep our finances healthy after Eid? Here are some tips from Bank Commonwealth for managing THR:

1. Create a budget for Eid expenses

To prevent THR from running out quickly, create a budget for Eid expenses such as homecoming, shopping for basic needs, and giving envelopes to extended family. Ideally, allocate the largest portion, which is 60 percent of the THR, for Eid expenses. 

2. Allocate for zakat and charity

For Muslim employees, fulfill the obligation to pay zakat and also give charity to those who are eligible. Allocate 10 percent of the THR for this purpose. 

3. Set aside a portion of THR for savings and investments

Set aside a portion of the THR for savings and investments for future needs, with an allocation of 20 percent of the THR. 

4. If you have debt, prioritize paying it off with THR

To prevent debt from piling up and adding financial burden, prioritize using the THR to pay off or make installments for existing debt. 

5. Don't forget about emergency funds

Lastly, set aside emergency funds with an allocation of 10 percent of the THR. Unlike savings that have specific goals, emergency funds can be saved for unexpected situations such as accidents, home repairs, or job loss.