It’s that time of the year again when people generously spend their 13th month salary and Christmas bonuses on buying special gifts for their loved ones. It can even be thought of as a tradition to show one’s care and compassion to people who matter most. To the extent of buying extremely expensive Christmas gifts, from jewelry to cars to condominiums even, Filipinos never fail to clearly express how much love they can give to one another.
But with home and condo expenses all over the place, it is with utmost importance to learn how to manage your money wisely. Bear in mind that Christmas is a time of giving and not overspending. You should not give in to the holiday pressure of buying things you absolutely do not need at the moment. Remember that Christmas, no matter how it is graciously observed, is not the only occasion to look forward to for the entire year. Thus, you should carefully think where you really want your hard-earned money to go this holiday season.
And because of this current trend, here are some timely tips that you may want to consider to avoid the financial pitfalls this Christmas.
It’s the Thought that Counts
The spirit of Christmas is strongly expressed in the form of gifts. And for many people, how you value someone is directly proportional to the price tags on these items. Well if you have the same thinking as them, then apparently you guys still don’t get Christmas.
Yuletide is a time for love. And quite frankly, material things may be a way to express love but will never truly capture its essence. So there is no point buying too expensive Christmas gifts this season, especially if it is at your expense. It would even be better if you give them something more personalized to really show your sincere care towards them. You can also resort to homemade gifts as this is becoming a trend nowadays.
But if you’ve decided not to veer away from the gift-giving tradition of Christmas, then you may want to set a limit to the amount you are going to spend on presents. List down all the names of the people you would like to send gifts to. Afterwards, set an amount you will allot for each gift. This way, there is an element of control present in the situation which will definitely help you save money this Christmas.
Settle Your Debts
Another excellent and meaningful way to spend your Christmas bonuses is by finally paying your overdue debts. You may want to pay that credit card bill that has been bugging you all year-round with notice-to-pay letters and phone calls. Or settle that 3-month delayed payment in your apartment that is giving you quite the headache for the longest time. So instead of using your money buying unnecessary things, use it to settle your debts and straighten your finances. Doing this will give you a clean slate in preparation for the coming New Year.
Invest on What’s Important
Now after you have fulfilled all your Christmas-y responsibilities, it is time to get yourself something for the holidays. Most people would go for new clothes, say a pair of jeans to match those shoes your mother gave you, or new gadgets just like the one your best friend has. This is extremely prevalent especially among Filipinos each year.
You may want to break that tradition by using your money on something else. A weekend getaway with your family would surely be enjoyed and remembered, instead of simply buying new things for them. Invite your friends to watch an upcoming concert of your favorite band and sing your hearts out. Go for the experience and build more memories with them.
Another practical tip would be to invest your Christmas bonus on things that would improve your life. Maybe you could finally put up that fruit shake business that you and your sister always wanted. Or go help your brother pay your nephew’s school fees. Focus on what truly matters.
Apply the 50/30/20 Budget Guide
This may be considered as one of the oldest tricks in the book, and apparently still very effective. The 50/30/20 guide simply means: 50% for savings, 30% for settling your debts, and 20% for free use.
In this time of holiday celebration, the 50/30/20 guide can help you manage your Christmas bonus more efficiently. The idea is to have you succeed keeping all three areas in balance simultaneously without compromising one. Following this guide will ensure that your financial foundation is firm, considering the expenses you have.
This guide is very universal and not mutually exclusive to the Christmas season. And of course you can change the allocation depending on the needs of the situation. Just make sure that you will still allocate some for savings, no matter how big or small, amidst your debts.
Manage your Bank Accounts
If you do not have an account yet, then you may want to get one by now. Most banks would have a save-up product option where you can automatically transfer a certain amount percentage from your salary each month. This Christmas, you can directly transfer half of your bonus to this account, which by the way cannot be withdrawn under certain bank terms, to ensure your savings for the following year. Rest assured that your savings are in good hands as this is very easy to manage and monitor through e-banking.
However, never forsake the 50/30/20 guide just because this option is available. Just think of this as a saving on top of your savings. You can also continue doing this all throughout the year in preparation for the next Christmas.
Pursue your Advocacy
Another way of putting things in new perspective is through your life-long advocacy. Maybe you have always wanted to help the community orphanage rebuild their shelter, or donate to the victims of the recent super typhoon. Spend your money with purpose and let it pave the way for other people’s smiles and laughter.
And since Christmas is a time for giving, make sure you do it wholeheartedly without reservations.
Cut Down Unnecessary Christmas Expenses
Now this is a difficult one. Normally, you and your family already have some Christmas traditions you uphold every year. Maybe you always host the grandest Christmas parties where you give expensive presents to your relatives. But now that you are on a tight budget, you may want to reconsider the situation and skip a few Christmas traditions. Your practicality on money use should always prevail over the temptation to overspend.
Celebrate the yuletide season with your loved ones without compromising your expenses. Depending too much on your Christmas bonus may be a very long shot if you really want to save. Christmas or not, spend your money wisely. Following these wickedly clever tips on spending your Christmas bonus will help you start saving effectively and hopefully seriously as well.