Category Archives: Savings

How to Avoid Overspending During Christmas Season

Photo credit:pixabay
Photo credit:pixabay

December is the happiest month in the Philippines. Many Filipinos look forward to it. In fact, as early as August Christmas carols are being played already in the radio.  Decors are starting to bloom the city streets and malls even months before the Christmas season, and extends till January in some provinces like in Cebu in celebration of the Sto Nino (Holy Child). It is a joyful season of sharing,  giving and receiving gifts. Not only that, it is also the time when people have money. Christmas bonuses, 13h month pay, gift certificates, etc are being distributed by employers to their employees. Christmas sale banners are spreading like wildfire in malls, stores and other retail establishments. It is so easy to spend. Anyway, it’s Christmas, people would often argue. Well, there’s nothing wrong with spending your money since that is your hard-earned money. However, we should keep in mind that there is still tomorrow. I’ve often heard stories of people falling into huge debt when the New Year comes even though they receive their month’s paycheck and 13th month pay. Their money is gone into thin air. And they start the year as if they didn’t earn any income the previous year. It is a sad reality because people often don’t know what to do with their bonuses and 13-month pay. Overspending not only Christmas, but other occasion as well is a menace that keeps people poor.

So in this post, I’d like to share four things to do to avoid overspending on Christmas season.

  1. Plan your Christmas spending.
Photo credit: pixabay
Photo credit: pixabay

There is a famous quote that says,”If you fail to plan, you plan to fail.” Planning your spending on Christmas can avoid you to lose your hard-earned money. As I write this, I just finished making a list on where to spend my money on Christmas season. It includes the fare in going back to my hometown, the gifts I’m going to give and to whom, the things I’m going to give myself, the contribution I will give to our New Year’s Eve dinner etc. Perhaps, my case is different from you, but I’m sure you get the idea. You don’t need sophisticated apps to plan. Just a simple pen and paper will do the job. I use Microsoft Excel since I’m comfortable using it. Try it now. Plan your Christmas spending. Write in details by including the estimated amount for each item.

  1. Determine your needs and wants.
Photo credit: pixabay
Photo credit: pixabay

Most often we get into trouble because we can’t distinguish our needs from wants. Sometimes we think that we need a new iPhone because we think we can’t live without it whereas we just need a call and text features, camera or can connect to Internet which an ordinary smart phone with a reasonable price can do. Same is true with shoes, clothes, watches etc. Review your list you made for your Christmas spending. Take a look at them and check if the thing you wrote down is really a need or just a want. If you think you don’t want the thing in your list, take it out. You’ll be surprised of how much you can save by not allowing yourselves to give free reign to your wants. There is an exercise which I do to avoid buying items that I don’t need. When I go to the malls and see something that appeals to my eyes, I would often check it and look for the price. Though I can afford it, I usually delay buying it for a month. When I go back after a month and  the thing still appeals to me, I usually buy it. But usually  I lost interest with it since I don’t really need it.

  1. Be careful with sale items.
Photo credit: pixabay
Photo credit: pixabay

That four-letter word is rampant during this holiday season. Christmas Sale, midnight sale, 50-percent sale are posted on the walls of many establishment particularly malls.  Sale is wonderful as you get a discount from the original price. I also love sale. I often check for sale pronouncement so I can take advantage of it. Yet, there is a problem lurking behind it when we are not careful. Impulse buying is a disease that keeps people from saving their money. It aggravates when there is a sale. People buy anything and immediately even if the things they buy are not needed. “I bought it in a sale, they often proudly say. But, when the excitement is gone, the thing is usually stock somewhere in the house and never used. What a waste of money. Impulse buying can be prevented by doing the tips I mentioned above, having a plan and a list of the things that are really needed.So,  every time there’s  a sale posted outside a boutique, check your list.

  1. Learn to invest
Photo credit: pixabay
Photo credit: pixabay

The idea of investing is setting aside a portion of your  income to investment instruments that make it grow through time for your future needs.  Research around on what investment instrument that suits you. It might be Stocks, Mutual fund, UITF or VUL.  Educate yourself first before investing. You can check blogs such as Stock Market For Pinoys or join an FB group like Investing in the Philippines Stock Market –  Tips and Tricks . Watch the Pesos and Sense video series. Here you will have an idea about investing in general. They will also help and guide  you as you start your journey in the investing world.

Christmas is a joyful season. May we all enjoy it and I’m hoping that when New Year comes, our pockets are still intact. Let’s be smart spender.

Have a blessed Christmas to you and your family.

 If you have some tips to avoid overspending during Christmas season, please feel free to write them in the comment section.

Three Tips on Savings That Might Save Your Future from Money Burden

savings tips
Photo credit: Wikimedia (Common)

Many people want to save, but only few really save. All of us dream to have a secured future where we don’t worry too much about money. A future where we can travel to places we want to visit or relax in a resort somewhere for a couple of days. Some of us save to prepare for the uncertainty or we say for emergency. Some save for the education of their children, build their own houses and to finance their retirement. There are many reasons for us to save. However, not of all of us do save. In fact, we spend more than what we save. We borrow so much money that we find ourselves buried in a mountain of debt. Remember the formula:

Income-Savings = Expenses

Unfortunately, most people do not follow it. Instead, unconsciously they use this

Income-Expenses = Savings

The former formula guarantees wealth. The latter guarantees poverty.

I remember a story told by a friend to me about a husband who was planning to divorce his newlywed wife whom he discovered shortly after the wedding had a debt of more than a million on her credit card. The girl had been using her credit card to the limit that she didn’t notice the increasing interest. She had been paying at a minimum, and she had no savings at all. Her behavior about money put her marriage on a very shaky ground even before she approached the altar. This is a true to life story which tells us the importance of savings and avoiding debt in our life. We don’t want to happen this to us so in this post I’d like to share three tips to save for your future.

  1. Set aside a portion of your income and put it in an account where you can’t see it. How much should you save? It depends. But a good start would be 5 percent. Every payday, get the 5 percent and put it on a separate fund before you start paying your bills. Do this for the next three months. Then increase it to 10 percent if you think you can afford it.
  2. Live below your means. We have often hear this, but I need to remind you because the latest smart phones are on their way to the market. Be patient. Before buying something that’s a bit expensive, list down all its benefits and wait a month before buying to give you more time to think it over if this is necessary or not. Oftentimes, we get carried by too much excitement that results to impulse buying. Don’t envy others who have more things than you. Be grateful for what you have right now.
  3. Be constant. As you start savings, you sometimes feel tired. That’s a normal reaction when you do something repeatedly. But, continue savings until the point when you are the one who is excited to put more money in your savings. It is rewarding to see your savings growing.

But, it doesn’t stop at savings. Saving is only a start to develop the habit. We also need to invest our savings. I will talk more on this in my future post.

If you have more tips to add, please feel free to write in the comment section.

By the way, you might also want to read the six steps to financial freedom.