“It’s the most wonderful time of the year…” (You just sang that in your head, didn’t you? No worries, I did too.)
And indeed, it is. There are many things to love about Christmas. The weather gets delightfully cooler (unless you live in Australia, that is), the streets light up beautifully at night, long-lost relatives come to visit (and bombard you with endless questions about when you are getting married, having another kid, etc., etc.), and you get to pig out as much as you like on delicious food because everyone around you is doing pretty much the same thing.
Christmas is indeed a time of abundance in more ways than one. Financially speaking, this is also when your OFW mom/dad/aunt/uncle/step-neighbor sends over a little extra along with their holiday remittance.
Depending on how generous your said OFW relative is, a Christmas remittance can be one heck of a windfall. Too often, though, many of us end up burning through it too quickly that it’s all gone by the first week of January. Yikes.
There are, however, a few things you can to do make the most out of your remittances this holiday season, and these include the following:
1. Put it away.
In other words, pay yourself first. Rather than saving what’s left of the remittance, spend what’s left after you’ve set aside your savings. 30% is a good portion to allot, though you can go as high as 50% if your OFW relative doubled your monthly remittance for the holidays.
If you’re unsure of how to portion your bonus remittance, put it in your non-ATM savings account first (or establish one using the remittance if you don’t have one yet). This way, you won’t have easy access to it, so you won’t be able to spend it on a whim.
2. Pay off outstanding debts.
Got credit card bills that are piling up? Still owe someone a big amount of money? Use part of the remittance to clear them all in one fell swoop.
It may not seem glamorous, but this will prevent your debts from accruing interest and possibly ballooning out of control in the future. Also, you’ll be doing your future self a favor by freeing up that part of your income that goes towards paying off the installments.
Besides, wouldn’t it be great to kick off your New Year with zero debt? Talk about a fresh start.
3. Consider investing.
What’s the most common excuse that people give for not investing? Yep, it’s “I don’t have any extra money right now.”
Well, with the extra cash coming your way this Christmas, you won’t have this excuse anymore. Storing money in a savings account is great, but if you want real and sustainable growth, you need to look at other options.
Marketable securities like government bonds and stocks are always advisable. You can put your money in a government bond for as short as three months and avail of higher interest rates than your average savings account. If you want to invest money in the stock market, on the other hand, it’s best to read up on it first. You can check out our article on the subject here.
Lastly, you can also use the extra cash as capital for a small business. There are lots of bazaars in the Philippines during Christmas, and they’re a great venue for selling your products. If you play your cards right by purchasing the right inventory or making in-demand products, you may just end up doubling your seed money and perhaps even stumble upon a profitable sideline for the rest of the year. Now, that’s a gift that keeps on giving.
4. Give back.
What is Christmas if not a time of sharing, eh? In the midst of the holiday rush to buy presents for your loved ones and yourself, why not spare a thought or a dime for the less fortunate?
It doesn’t have to be a specific amount (though some people voluntarily tithe over ten percent of their bonuses or holiday remittances), so long as it gives a bit of joy and hope to those who need it the most.
For instance, you can sponsor a child’s education for as little as Php750 a month via World Vision Philippines. Blacksoup Cafe + Artspace also has a “Suspended Noche Buena” program where you can purchase a meal pack (each one containing sardine pasta, Christmas ham, Queso de Bola, and deep fried pudding) for Php250 via bank deposit. Each meal pack purchased will be delivered to the homeless on Christmas Day, and the restaurant will be posting photos of the distribution the day after.
5. Enjoy yourself.
Because you deserve it, after all the hard work you put in during the past year and after all that delayed gratification and giving back that you’ve been doing afterwards.
So, take what’s left of the remittance after the savings and donations, and then splurge on something that fits within your budget, whether it’s a day at the spa, an out-of-town weekend with the family, or a pair of snazzy designer kicks.
Now, as for the things you should avoid doing:
1. Counting your chickens before they hatch.
Assuming that you’ll end up with a fixed amount of money once the remittance arrives is futile. For one, the exchange rate fluctuates, so you could end up receiving more or less than expected.
Also, there are service fees to contend with, and these can cut into your Christmas remittance if they increase in proportion to the amount remitted (but thank God for iRemit’s Au$7 flat rate!).
2. Planning your financial budget for next year around it.
See previous item.
3. Racking up credit card debt in anticipation of your remittance.
If you want your remittance to disappear before it even clears in your bank account, then by all means, go ahead and buy that 70-inch, curved screen LCD television to replace your barely-a-year-old 65-inch, flat screen LCD television.
Otherwise, keep your credit card tucked away.
4. Blowing it all on the latest iPhone, Galaxy, or any other gadget.
Unless you haven’t bought a new phone in the past five years and your current one is already on its last legs, refrain from an unnecessary upgrade. Gadgets depreciate fairly quickly these days, and you want to put your money to good use.
If you really need to buy a new mobile, wait for a few months until the latest update hits the market, and then purchase the model that came before it. By then, it’ll be much cheaper and you’ll have enough time to save up for it.
5. Use all of it on gifts for your family, friends, and casual acquaintances.
You should, of course, take time and effort to get your loved ones some thoughtful presents for Christmas.
What you shouldn’t do is go overboard, either by getting them overly-excessive gifts that they don’t necessarily need or want or by giving too many people presents. (Do you really need to get your neighbor’s great grandma’s cousin’s half-sister something? Really?)
Christmas is certainly a time for giving and for enjoying the company of your friends and family, but it shouldn’t come at the expense of your well-being, financial or otherwise. Sure, being generous is always an admirable trait, but you can’t give away what you don’t have, no?