November 21, 2014

Finance Friday: No Cramming for Christmas!

"Christmas is not an emergency; it comes every year." - Dave Ramsey
Who else thinks Dave Ramsey is on point here? No one would oppose it because it's true: Christmas comes every year and, guess what, we know exactly when it happens!

But why do we wait until the last minute to prepare for it? I'm not taking about the decorations and the planning. We usually begin celebrating Christmas on September 1 (right?), and even before Halloween, some of our neighbors have already decorated their homes.

No, I'm talking about preparing for the spending.

A lot of people (like me) cram for Christmas. The result? Impulse buying, overspending, and buying either too many gifts or too little.

Since we all agree that Dave Ramsey is right (if you don't, feel free to tell us why!), I think there should be no excuse to cram. Since we know it's already the season to be jolly, we should have already started preparing for it. Financially.

How do we do this? Here are some tips:


By the time September approaches, radio stations begin playing Christmas songs. That should be our cue to start planning.

What should you plan for? Plan for the things you will be spending money on: decorations, gifts, food, etc.

Based on this plan, create a realistic budget that you can work with. Make sure it is generous enough to fit all of the possible expenses (you have to avoid unforeseen expenses to avoid debts) but practical enough to not go beyond what you can afford.

Tip: Also include in your budget some extra money to spend on unplanned parties and trips. Be prepared for the unexpected!


Once you come up with a doable figure, begin saving for it early. Ideally, one should begin saving two or three months before Christmas; doing this makes saving easier because you only need to cut small amounts from your income.

However, since it is already almost the end of November, if you haven't begun saving yet, I should say that it is best to tighten your belt now.

If you have extra money now, no matter how much it is, as long as it's not alloted for a need, keep it to jump-start your Christmas fund. Most Filipino employees will receive their salaries on the 28th and another on the 15th. Remember that total amount you have come up with in number 1? Divide the amount into two and that's the amount you need to deduct from your salaries for the Christmas fund.

Also try not to depend on your bonus or 13th month pay especially if you don't know when you will receive it! And if you already have a Christmas fund with your saved money, you can use those bonuses for more important things like investing.

(Here are what you can do to spend your 13th month pay.)


As a self-confessed shopper and Christmas-lover, I have already begun "window Christmas shopping" several months ago so now I have a good idea of what I can buy for whom. This is more beneficial because when you find yourself in a crowded mall during the Christmas rush, chances are you won't have much time (nor space) to look for perfect gifts and you would have to settle for whatever you first see, even if it is too expensive.

For me, online shopping is best because I can do it without leaving the house. With this point in mind, I begin bookmarking things I plan to buy as gifts and then scout for more websites where I can buy more.

You can also start shopping in the malls now because there are no crowds yet. For example, last Sunday, I bought kids shirts as gifts from the Off-Price Show.

Tip 1: It is best to buy several gifts on one website to save on shipping fee.

Tip 2: Go local! They are not only cheaper but also often more sustainable. And you're helping a family, not a conglomerate.


Okay, this is more of an anti-debt tip than an anti-cramming one. Whatever happens, do not borrow money. I don't know about you, but I don't want to spend my holidays thinking of how to pay for them!

You can use a credit card, though. I admittedly use a credit card because it's safer than bringing cash and there are also nice rewards.

But only use the credit card as a replacement for cash as a transaction tool. This means you're only using the card for convenience and that you have the money to pay for whatever you bought anyway.

Do not use a credit card if you can't pay for the item in cash.

With this in mind, only buy things you can afford. Since Christmas is not an emergency, do not be tempted to spend more than what your wallet can allow.

So those are what I think can help us spend money more widely for Christmas. What about you? How do you prepare for the holiday spending?

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