Managing THR 2026 Wisely: Prioritise Repayment of 'Expensive Debts' for Liquidity
The arrival of the religious holiday allowance (Tunjangan Hari Raya, THR) often provides welcome relief to workers’ financial stability. However, this annual financial allocation requires careful strategy to ensure it is used wisely.
Financial planner Rista Zwestika, CFP, WMI, advises the public to use a priority scale when repaying obligations, particularly by distinguishing between “expensive debts” and “managed debts.”
Rista explained that prioritising repayment of debts that strain finances is a crucial step.
“I typically use a straightforward approach. Expensive debt versus managed debt,” said Rista.
According to her, expensive debt includes consumptive instruments with high interest rates that will continue to erode cash flow if left unpaid.
“Expensive debts such as credit cards, buy-now-pay-later schemes, and high-interest consumer loans should be repaid first,” she stated firmly.
The characteristic of such high-interest debt makes it a heavy burden on financial health if not addressed promptly.
On the other hand, not all obligations need to be settled using THR funds. Rista views managed debts, such as mortgages (Kredit Kepemilikan Rumah, KPR) or loans with low interest rates that do not have urgent deadlines, as not always needing to be prioritised for repayment now.
In a dynamic economic situation fraught with uncertainty, maintaining adequate cash reserves or liquidity is far more important than forcing oneself to become debt-free but losing financial security.
“It does not always have to be repaid with THR. In conditions of economic uncertainty, maintaining liquidity is also important. This is why I often convey the principle: ‘Do not become debt-free only to run out of money’,” explained Rista.
She also recommended that a portion of THR funds be set aside as a cash reserve to prepare for emergency situations.
This strategy is expected to create a balance between reducing past financial burdens and safeguarding future needs.
The THR payment obligation itself has been reinforced by the Government through the issuance of Circular Letter from the Ministry of Manpower No. M/3/HK.04.00/III/2026 concerning the Implementation of Religious Holiday Allowance Payments for 2026 for Workers/Labourers in Companies.
Minister of Manpower Yassierli affirmed that this worker entitlement is an obligation that must be fulfilled by every employer.
With clear regulations in place, workers are expected to manage their financial rights in a more prudent and planned manner.
Amid the shadows of global geopolitical uncertainty that has triggered increases in energy and food prices, the public has been reminded to spend THR more wisely.