Finance Expert: Don’t Be Debt-Free Yet Run Out of Money Because of the THR

Finance expert: Don’t Be Debt-Free Yet Run Out of Money Because of the THR

A financial planner, Rista Zwestika, says the Tunjangan Hari Raya (THR) can be used to settle debts, provided that repayments are prioritised according to debt type. “I usually use a simple approach. Expensive debt vs manageable debt. Expensive debt such as credit cards, pay later, high-interest consumer loans should be paid off first,” she said.

Because it can burden finances, paying off expensive debt is advised to be prioritised. Debt that is more manageable, such as a mortgage or loans with low interest that do not have to be paid immediately, according to Rista, does not always have to be settled using THR funds.

“It doesn’t always have to be paid off with THR. In uncertain economic conditions, maintaining liquidity is also important. Therefore, I often convey the principle, ‘Don’t be debt-free, but run out of money’,” Rista stressed.

In uncertain economic conditions, she said, a portion of THR should be set aside as cash reserves to guard against risk.

The government has issued Circular No M/3/HK.04.00/III/2026 from the Minister of Manpower on the Implementation of the Provision of Religious Holiday Allowance (THR) for 2026 for workers in companies.

Minister of Manpower Yassierli said that providing THR to workers is an obligation that must be fulfilled by employers.

Additionally, Rista offered tips for managing THR amid global uncertainty that could affect energy and food prices. In the face of geopolitical uncertainties, society should be more careful in using THR.

“I usually recommend a simple principle: THR equals 3Ps. Prioritisation, Protection, and Celebration,” said the OJK (Financial Services Authority) Sharia finance literacy ambassador.

She noted that THR usage should prioritise meeting essential needs related to Eid al-Fitr celebrations, such as paying zakat, homecoming (mudik), and meeting family needs during the holiday.

A portion of the THR, she said, should be set aside for an emergency fund as part of financial protection.

“If the emergency fund is not yet ideal with at least 6–12 months of income, then part of the THR should be allocated to strengthen the emergency fund, because in times of uncertainty, a cash buffer is often more important than a short-term lifestyle,” she explained.