Service bonus: 4 ideas to keep your money from slipping through your fingers

The service bonus is a mandatory social benefit in Colombia through which the employer pays the employee as financial recognition for the work performed throughout the year. When it's about to be paid, it's important to have four ideas about what to do with that money. How can you invest it so it doesn't slip through your fingers?

The service premium is paid in two annual installments: the first by June 30th and the second within the first 20 days of December. Since these are exceptional payments, BBVA recommends not adding them to your regular monthly budget, but instead allocating them to options that generate future value. In this regard, it offers some recommendations for investing them:

1. Pay off outstanding debts Using the bonus to pay off debts, especially on credit cards or active loans, helps reduce interest and improve financial health.

2. Investment funds Investment funds allow diversification and access to different assets, bonds or businesses, depending on the investor's profile and needs.

3. Education Investing in your professional training or refresher courses can open up new job or entrepreneurial opportunities.

4. Family Activities Allocating part of your bonus to family experiences and activities fosters emotional well-being and strengthens bonds, especially during special times of the year.

​

(READ MORE: If you want to avoid scorpions in your home, this is the place you should clean immediately )

Are there other investment ideas?

There are more possibilities, but some of them require more knowledge and development. Learn about other investment options.

- Create an emergency fund: Setting aside a portion for unexpected events helps maintain financial stability in the face of unexpected situations.

- Start or strengthen a business: Using the bonus to start or improve your own business can generate additional income.

- Buying stocks: For those with experience in the stock market, investing in stocks can generate high returns, although with greater risk.

​

(READ MORE: Latin America's 10 Hidden Gems: Colombia Appears in the Ranking with This City )

How is the service bonus calculated?

The service premium is easy to calculate and consists of three parts:

1. Base salary includes the agreed monthly salary plus other remuneration items such as commissions, overtime, surcharges and transportation allowances, etc.

2. The number of remuneration received and other data are multiplied by the number of days worked. This corresponds to the number of days actually worked in the semester.

3. Then, divide by 360. This represents the number of days in a year to calculate the corresponding monthly salary proportion. This will give you the amount to be received. If the worker worked less time, the proportion is calculated based on the actual days worked.

​