DECEMBER is traditionally a special month for many Filipinos. The cool weather and vibrant lights usher in a month of festivities.
It is a month filled with celebrations and gifts. It is a month when families get to be together. Given the challenges brought about by the reeling effects of the pandemic, it is a month that can be seen to provide a ray of hope for the coming year.
Still, holiday spending must not be wanton and must not be irresponsible. There are a number of ways to make holiday spending a lot more manageable.
Income must be the first consideration. The Philippine economy has been in bad shape due to the negative impact brought about by the pandemic. Many businesses have suffered and many Filipinos have been displaced. The tough economic conditions adversely affect income.
The lack of an emergency fund among individuals and businesses makes matters worse. Therefore, if income is lowered, then spending must be lowered too. Spending more than income will most likely lead to debt and this will just exacerbate things.
A budget for holiday spending must be determined at the start of every year. It is okay to do holiday spending but it must be budgeted. A total holiday spending budget can be developed and it can be a reasonable percentage of actual income and expected income.
A holiday spending list can then be developed to identify the pertinent details of spending like recipients and amounts. Having a budget makes holiday spending strategic and organized. Having a budget makes holiday spending easier to do.
Time is a great ally in holiday spending. The key is to plan early and execute early. Being able to look around for the best deals with respect to product, price, place and promo can possibly lead to gains in terms of both price and quality.
For pricing, there may be items that can probably be bought at cheaper prices if they are purchased during non-peak seasons. For quality, being able to compare the various features, advantages and benefits across brands and categories can lead to the best purchases being done.
Research can help. Identifying trends on gifts has been made easier due to advances in technology. While traditional gifts are still valued, there may be alternative emerging trends that are taking place. For example, the pandemic has led to many Filipinos engaging in do-it-yourself activities.
It may be possible that a do-it-yourself gift may be cheaper and be also more appreciated given the personal touch. Gifts that support the environment also help remind recipients of bigger societal causes like saving the earth.
In terms of payment, cash would still be king or queen. Cash makes it easier to track expenses against budgets. It also helps avoid impulse purchases and debt. However, in the event that credit cards will be used, one should be cognizant of the right ways of managing credit cards.
Late payments will just lead to cumbersome debt. Only paying the minimum balance is not recommended since higher interest rates will be most likely forthcoming. One has to be on top of credit transactions so that there are no loose ends.
Holiday spending is usually done for families and friends. However, the pandemic makes us realize that we need to go beyond our social circles. Given the struggling economy, a certain part of holiday spending can be allocated to helping our fellow Filipinos who are finding a way to survive and pivot.
Our economy is only as strong as its weakest citizenry. No Filipino must be left behind in good times and bad times. Government already has its hands full in managing our nation. Every contribution we make matters.
Experiencing December festivities with the reality of a lingering pandemic is an opportune time for us to take stock of what we need to continue doing, stop doing and start doing with respect to our personal finance situation. Spending wisely will go a long way as right decisions pave the way toward a good future.
Genesis Kelly “Gemmy” S. Lontoc is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 93rd RFP program in January 2022. To inquire, e-mail info@rfp.ph or text at 0917-6248110.