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April 21, 2012


November 24, 2009


By Edmund Lao

Christmas is just around the corner. This is the holiday everyone is waiting for. Long vacation, shopping spree, partying, and especially fat bonuses are the benefits employees get from the companies they work in. During this holiday season, every company and individual is on the spending mode, buying things and food items for gift giving to clients and friends. There is excess money to earn and at the same time, plenty to spend.

I noticed that sometimes, the word Christmas is written as X’mas (read as Exmass).  Since this is a season of excesses, it may also be termed as ‘Excess’mas!

Excess money received in the form of bonuses is a good source of investible funds. It is because for the past eleven months, we are able to budget our income for our needs. Whether the benefits are given or not, we have lived comfortably. The problem with the expected benefit is that it was already spent even before it reaches our pocket. It is exactly spending tomorrow’s money today.  I remember some years back, I distributed to the workers their 13th month pay and SL /VL cash conversion. The next day, I asked them what happened to their benefits. Not a single one gave me a different answer. All of them consumed the money they received. A big portion went to their wives who bought gifts for their children and lavish food for dinner. The rest of the money went to drinking session. Then a few days after, before Christmas Day, life is normal again. Why did I say back to normal? It is because their normal life is to ask for Cash Advance! They lived a life of a one-day millionaire and a pauper forever.

Let me share what I did for the past twenty years. Every time I receive Christmas bonus, I never spent a single cent. It is because I grew up accustomed to being content with what I have. I saved the whole amount in the bank time deposit. It was my intention not to have easy access to my savings.  Mindsetting played a very important factor here. Here is where discipline and attitude counts a lot.  I conditioned my mind to believe that my holiday benefit was gone already. In fact, it was already spent in buying my future. Pretending that I have no money anymore, I programmed my mind to believe I have none to withdraw. So I bid farewell to my money, sacrificing gratification, with the objective of seeing it grow when I will need it the most. That time, interest rate was quite high at sixteen to twenty percent per annum. A few more years later, interest started to decline. I then decided to gradually transfer and diversify my funds to other better performing instruments.

Christmas, although commercialized, can be celebrated simply. Below are suggestions to help minimize expenses as we go with the tradition:

  1. Buy gifts ahead of time. Always make it a point to start buying as early as possible especially when there are mallwide madness sale and tiangge. Divisoria is the favorite place to shop because of the low price. Just make it a point to buy good quality item.
  2. Recycle gifts. There are gifts from last year’s holiday that may be useful for the intended recipient.  It is the thought that counts.
  3. Home made delicacies. It is much cheaper to give home made delicacies than to buy from the store. At the same time, home made items are produced with labor of love so it is more appreciated by the recipient.
  4. Engage in business. This is a great time to do business. A lot of gift items can be produced out of creativity. Doing business brings additional income for investments.
  5. Avoid buying firecrackers. Buying and exploding firecrackers is a sure way to unnecessarily burn money. Not only that, there is a risk of fire hazard and New Year revelry accidents that costs a lot of money. There are other ways to greet the coming year safe and pollution free.
  6. Savings account as Christmas Gift. It is a good idea to instill savings to children while they are young. We will be inheriting to them our wealth later when our time us up. It pays to educate them so they will be good stewards of the money we will leave for them. In that way, we have not spent our effort in vain, since the reason we earn money is to give our children the best .
  7. Live simply. Be content with what we have. Never compare with others. What may be good for them may not be good for us. The major culprit of unnecessary expense is envy. The less desire we have, the better for us.
  8. Avoid credit card purchases. This is the time to avoid flirting with credit card as the temptation to buy is so strong that we might be charged high interest for items we bought on impulse. There is a risk we might waste our bonus to pay for credit card interest, finance charge and late fees.

By reducing expenses this holiday, for sure there will be extra money after the holiday season is over. Start saving and investing excess money and surely next Christmas, the excess will be our money and not our expenses.

Have a merry and fruitful “Excess”mas ahead


From → Savings, spending

One Comment
  1. wealthadvocate permalink

    thanks so much on your kind words. yes you can share. it is my advocacy to spread financial understanding through my blog.

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