We know that expenses increase during the Christmas season: there are gifts to buy, our wardrobes to update, and all those things we should have invested in during the year. You’ve probably made all kinds of plans for making good use of that extra money, known as a Christmas bonus, which you receive in December, only to find yourself with 100 pesos in your pocket and a long list of debts and unfinished business before you know it. People say that money disappears like water and that it’s normal for it not to go far, and so on—but that’s just an excuse made by people who don’t know how to manage their money. So here are some tips that can help during this high-spending season.
SAVE
Many of us don’t like the idea of saving, but the truth is that it’s one of the best things we can do. If you find it difficult, start with small amounts. Put money aside throughout the year, whether it’s one peso or sometimes 20, 50 or 100. Buy a piggy bank that’s not easy to open to avoid temptation. If you prefer a more modern option, use a trusted savings card. This will give you extra money on top of your Christmas bonus in December, so you’ll have savings that can get you out of a tight spot.
MAKE A LIST AND PRIORITIZE
When we have money in hand, we tend to spend it as we remember what we need or on anything that comes our way. This is the worst way to manage our money. Make a detailed list—that is, don’t just write:
– clothes
– gifts
– things for the house.
This list is too vague. Try to make it more detailed, for example:
– 3 blouses, 2 pairs of trousers, 5 pairs of underwear: 1000 pesos’ worth of clothing.
– gifts: mom (600), dad (600), brother (500).
– home: mirrors (200-350), tablecloths (100-150)
Try to stick to the budgets on your lists so you don’t overspend. Prioritise: what’s most important? If you have a leak at home, that should take priority over buying two pairs of trousers, right? Put it first. That’s how we end up with a bunch of impulse purchases while the things that needed attention most are put back on the waiting list.
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DIVIDE THE MONEY INTO 3 PARTS
This is a little of everything I mentioned earlier. In other words, set aside some of the money you want to save. We always say we don't want to spend our entire Christmas bonus, but we always end up doing it. Why? It's simple: when we have more money than we're used to, we tend to say, “I'll save whatever's left over.” We think that since we have a large amount of money, we'll obviously have some left, but our brain doesn't work that way. In our minds, the amount we have to spend is the total amount. For example, if we receive 20,000 as a Christmas bonus and think, “I'm sure I'll have about 3,000 left over,” but leave it with the rest, our brain will make us spend as if we have 20,000 and not 17,000. So we have to trick it a little: from the outset, our budget should be 17, and we should plan our bills and expenses around that amount. As soon as you get the money, set aside 3,000, put it away, and act as if it was never there. You'll see a big difference. The second portion of the money will be for expenses, based on your list of things to take care of and pay for. The third portion will be for extras and unexpected costs. Even if we have everything well organized, there's always a chance something extra will come up. And I don't mean the tamales you happen to see or that beautiful dress that wasn't on the list. No, although you might wish that's what I meant, I'm actually talking about things like having more people over for Christmas, forgetting to buy someone a gift—oops!—or something breaking, among other things. You could put the money you saved throughout the year toward these expenses.
As a final tip, I’d advise you not to give in to temptation. When December comes and your Christmas bonus has just landed, it’s easy to end up with savings clubs, 3 gift exchanges and lots of other expenses. Avoid these extras when you know they aren’t essential. Happy holidays, and make the most of your Christmas bonus!
