Cautious holiday spending | Genesis Kelly S. Lontoc

DECEMBER is traditionally a special month for many Filipinos. 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 come together. Given the challenges posed by the crippling effects of the pandemic, this is a month that can be seen as a beacon of hope for the year ahead.

Yet vacation spending shouldn’t be free and shouldn’t be irresponsible. There are a number of ways to make vacation spending much more manageable.

Income should be the first consideration. The Philippine economy is in bad shape due to the negative impact of the pandemic. Many businesses have suffered and many Filipinos have been displaced. Difficult economic conditions negatively affect income.

The lack of emergency funds among individuals and businesses makes matters worse. Therefore, if the income decreases, the expenses must also be reduced. Spending more than income will most likely lead to debt and this will only make matters worse.

A budget for vacation expenses should be determined at the start of each year. It’s fine to spend on vacation, but it needs to be budgeted for. A total vacation spending budget can be developed and it can represent a reasonable percentage of actual income and expected income.

A vacation expense list can then be compiled to identify relevant expense details, such as recipients and amounts. Having a budget makes vacation spending strategic and organized. Having a budget makes vacation spending easier to do.

Time is a great ally in vacation spending. The key is to plan early and execute early. Being able to seek out the best deals in terms of product, price, location, and promotion can eventually lead to price and quality gains.

For pricing, there may be items that can probably be purchased at lower prices if purchased during off-season. For quality, being able to compare the different features, perks, and benefits across brands and categories can lead to the best buys.

Research can help. Identifying trends in gift giving has been made easier by advancements in technology. While traditional gifts are always appreciated, other emerging trends may occur. For example, the pandemic has led many Filipinos to engage in DIY activities.

It is possible that a do-it-yourself gift is cheaper and also more appreciated given the personal touch. Gifts that support the environment also help remind recipients of more important societal causes like saving the earth.

In terms of payment, cash would always be king or queen. Cash makes it easy to keep track of spending against budgets. It also helps prevent impulse buying and debt. However, in the event that credit cards will be used, one should know the correct ways to handle credit cards.

Late payments will only lead to heavy debts. It is not recommended to pay only the minimum balance, as higher interest rates are most likely to come. One must be aware of credit transactions so that there are no lost ends.

Vacation spending is generally made for families and friends. However, the pandemic makes us realize that we have to get out of our social circles. Considering the struggling economy, some part of the holiday spending may be earmarked to help our fellow Filipinos who find a way to survive and pivot.

Our economy is as strong as its weakest citizens. No Filipino should be left behind in good times or bad. The government already has its hands full in running our nation. Every contribution we make counts.

Experiencing the December festivities with the reality of a lingering pandemic is an opportune time to take stock of what we need to keep doing, stop doing, and start doing in regards to our personal financial situation. Spending wisely will go a long way, because the right decisions pave the way for 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 Bidding Program in January 2022. To inquire, send an email [email protected] or send an SMS to 0917-6248110.

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