How to Start an Emergency Fund Using Your 13th Month Pay

The holidays are just around the corner, which means many of us are already thinking about our 13th-month pay and holiday bonuses. Maybe you’re planning to buy gifts for your family, book that trip you’ve been looking forward to, or finally get that gadget you’ve been eyeing all year.

And honestly, there’s nothing wrong with treating yourself after working hard all year. But before you spend your bonus, it might be worth setting aside a portion for something that isn’t as exciting but could come in handy later: your emergency fund.

If you’re just starting to earn your own money, saving for emergencies might not be at the top of your priority list yet. Metrobank’s financial education program, Earnest, explains that an emergency fund is money set aside specifically for unexpected and urgent expenses. It’s not meant for shopping during a big sale, your next vacation, or those little treats you can probably live without for now.

It may not give you the same excitement as buying something new or booking a flight, but having money set aside for emergencies can make a big difference when life throws you an unexpected expense.

Here are a few things to keep in mind when starting your emergency fund.

1. Make Room for Savings in Your Holiday Budget

It’s easy to lose track of spending during the holidays. Between exchange gifts, family reunions, dinners with friends, and those “minsan lang naman” purchases, your expenses can add up before you know it.

Before the holiday spending begins, take a look at your budget and decide how much you can spend on celebrations and how much you can save.

If you’re expecting your 13th-month pay or a holiday bonus, consider putting a portion directly into your emergency fund before spending the rest. You don’t have to save everything, either. You can still enjoy your hard-earned money while making room for your future needs.

Not expecting a bonus this year? That’s okay, too. Start with an amount you can comfortably set aside from your regular income. You don't need to save a huge amount right away to get started.

2. Figure Out How Much You Actually Need

When it comes to saving, it’s easy to compare yourself with friends who seem to have their finances all figured out. But your emergency fund should be based on your own expenses and responsibilities.

Start by listing your monthly essentials, including food, transportation, rent, utilities, and other regular bills. If you’re still living with your parents, don’t forget your share of the groceries and household expenses.

Once you know how much you usually spend, you’ll have a better idea of how much you need to set aside for emergencies.

As a general guide, the recommended emergency fund can vary depending on your circumstances. Metrobank Earnest suggests that single individuals without dependents aim for an amount equivalent to six to 12 months of average daily expenses, while married individuals or those with dependents may aim for 12 to 24 months of average living expenses.

That might sound like a lot, especially if you’re only beginning to save. Don’t let the numbers discourage you. Think of them as a long-term goal rather than something you need to accomplish before the year ends. Start with a manageable amount and build from there as your income and responsibilities change.

3. Remember, Not Every Sale Is an Emergency

We’ve all been tempted by a good deal, especially when a sale is about to end. Sometimes, it feels like we’re saving money by buying something at a discount. But if it wasn’t part of your budget in the first place, you’re still spending money.

Your emergency fund should be reserved for unexpected and urgent expenses, such as medical bills, necessary home repairs, or a sudden loss of income.

That concert ticket you’ve been waiting to buy? Your dream bag? A new phone during a flash sale? Those are better covered by a separate savings goal.

Before dipping into your emergency fund, ask yourself if the expense is truly urgent and necessary. If it can wait until your next payday or until you’ve saved enough for it, leave your emergency fund alone.

Your future self will thank you for it.

4. Make Saving Part of Your Payday Routine

Have you ever checked your bank balance a few days after payday and wondered where your money went? It happens, especially when bills, food, and everyday expenses start piling up.

One way to make saving easier is to set aside money as soon as your salary arrives, rather than waiting to see how much you have left at the end of the month.

Choose an amount that fits your budget after accounting for your bills and other essentials. It doesn’t have to be a large amount. What matters is making it a habit you can stick to.

You can increase your contributions when your income allows or adjust them when expenses get tight. The goal is to build a savings routine that works for you, even after the holiday spending is over.

5. Keep Your Emergency Fund Separate From Your Spending Money

When your savings and everyday spending money are in the same account, it can be tempting to treat your entire balance as money you can spend.

Keeping your emergency fund in a separate savings account can help you keep track of how much you’ve saved and make it easier to leave that money untouched unless you really need it.

Metrobank eSavings offers a convenient way to open and manage a savings account through the Metrobank app. It can be an option if you want a dedicated place to start building your emergency fund.

Of course, emergencies can happen even when you’ve been saving consistently. If you need to use the money for its intended purpose, don’t feel guilty about it. That’s exactly why you saved in the first place. Once you’re able to, work on replenishing your fund so you’ll have a financial cushion for the next unexpected expense.

Give Your Future Self a Gift This Holiday Season

There’s nothing wrong with enjoying your 13th-month pay or holiday bonus. You worked hard for that money, and you deserve to enjoy some of it.

Just remember to leave room for your future needs, too. Even a small amount set aside today can help you feel more prepared when unexpected expenses come along.

So before you check out your holiday shopping cart, consider putting a little money toward your emergency fund first. You don’t have to have everything figured out right away. Starting is already a good first step.

Ready to start saving? You can open a Metrobank eSavings account through the Metrobank app. Prepare one valid ID to begin your savings journey in minutes.*

For now, Metrobank eSavings is available for new depositors only.