Tips for Managing THR for Investment, from Mutual Funds to Government Securities - Finance

Bisnis.com, JAKARTA - The Tunjangan Hari Raya (THR) has always been awaited by workers. Under Indonesian government rules, THR must be provided no later than seven days before the holiday, including ahead of Idul Fitri. For many, THR is seen as “extra money” for Lebaran needs. But if managed wisely, THR can be investment opportunities to build healthier financial habits. Tita Gracia Yosheko, a Financial Planner from Finansialku, says THR should not be viewed merely as seasonal shopping money. The funds can be utilised as a moment to strengthen an investment portfolio. The simplest step is to allocate some or all of the THR to investment before using it for consumption. This way, people can be more disciplined in prioritising long-term financial goals. “THR should be treated as a catalyst to strengthen the financial foundations, not just extra seasonal shopping money,” said Tita. According to Tita, one way to utilise THR is to add to an existing investment portfolio. For example, topping up mutual funds, purchasing Retail Government Bonds, or increasing equity holdings. Additionally, THR can be used to purchase instruments with a medium to long investment horizon. This approach shifts funds from being consumption-focused to investments with potential for capital appreciation. However, amid global economic uncertainty, instrument selection is also an important consideration. Retail investors are advised to choose instruments that are relatively stable, liquid, and easy to redeem if needed. Some instruments to consider include Retail Government Securities (SBN) such as SBR or ORI, money market funds or fixed income funds, as well as gold as portfolio diversification. “In an uncertain economic environment, retail investors should choose instruments that are stable and easy to redeem,” adds Tita. In managing THR, the public should also consider how funds are allocated. Generally, a portion of THR can be allocated to consumption and social needs during Lebaran. As a practical guide, around 30–40 percent of THR can be allocated to consumption needs. Meanwhile 20–30 percent can be used to strengthen emergency funds, and the remainder for investment or debt repayment. However, priorities can change depending on individual financial conditions. If someone still has high-interest debt, paying off that debt can be the wisest move. “If you still have high-interest debt, the priority should be to reduce debt burden first,” says Tita. In some cases, even all of the THR can be used to accelerate debt repayment.