Have Yourself a Merry Little Christmas

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Have Yourself a Merry Little Christmas

Efren Ll. Cruz, RFP®

(The article first appeared in Business Mirror.)

Christmas is once more around the corner. People and establishments are beginning to decorate with multi-colored lights. Chestnuts (castañas) are roasting on the open fire, sales ladies are donning Christmas hats while malls are making every effort to make the yuletide gay.

It’s that time of year when good friends are dear. Yet you have an enemy that can wreak havoc to your season of joy. And who else could that be than wanton spending. So as the saying goes, keep your friends close and your enemies closer.

How do you keep a close watch on your spending this Christmas? Despite the recent global financial crisis, the urge to splurge seems to be stronger than ever. You feel obliged to give material gifts even though no greater gift is there than love.

Firstly, save first before you spend. You don’t have a fountain that springs eternal wealth. Come up with a budget and stick to it. And to guide you in your budgeting, manage expectations.

Everyone wants to receive something, anything in shiny colored wrappers with those gold and silver trimmings. So twelve days or weeks before Christmas, start dropping hints to those expecting from you that you want to do something different this season and for the seasons to come. Tell them that what they will receive from you is going to be worth more than material things.

More importantly, manage your own expectations. You do not have to give if you are a poor boy (or girl) too with no gifts to bring, especially if you are one of the victims of the recent typhoons. But if you do have the means, you do not have to blow it all off this Christmas.

So what could you give this Christmas that would speak volumes of your love and care for others? Why, your imagination and creativity of course. Putting value added is the name of the game. It tells the receiver that you put thought into your gift and didn’t buy a ready-made one just so you can say that you have a gift.

Don’t digital cameras come with movie making software nowadays? So why not make an MTV for your loved ones? There are also so many inexpensive arts and crafts items that you could create from the materials you already have at home, paper mache being one of them. It can even be as simple as giving a “pimped” card. Once, I bought a card that had a popular cartoon character holding up a red balloon. To make it more meaningful, I attached a real red balloon to the card itself – and believe me, it was a hit.

For children, take advantage of their own imagination. It doesn’t take much for a child to turn a tea set into an afternoon gathering with the Queen of England. You just have to inject the proper motivation. Why, when I was a child, I turned tens of bottle caps into warring armies. There were even damsels in distress waiting to be rescued.

Now if you are the type who needs off-the-shelf items from stores to jump start imagination and creativity, do a Santa Claus. Make your list before you go to the store and check it twice. Add weights to what you give by finding out who has been naughty or nice. And when you finally get to the store, limit your time there. Let your list be your red nose that would guide your shopping sleigh that night (or day). And don’t wait for the last minute. Shop early, even as early as the start of the year. There may be post-Christmas season discounts on items that shops need to get rid of. Take advantage of discounts and discount stores, even those in Divisoria.

One of the better gifts to give is the one that keeps on growing. No matter how small, open a savings or investment account for someone you love. At the every least, the account will teach them a thing or two about money. Hopefully, it will be their catalyst in working towards their own financial freedom.

If you follow these few simple steps, you should be in a better position to reign in your spending this season, even if attractive borrowing options abound.

One last thing. There are people who are so down and out that they don’t even realize that it’s Christmas time at all. So why not share your fortune with them and let them know that it’s Christmas time once more?

Do have a Merry Little Christmas this year. Cheers!

Efren Ll. Cruz is a registered financial planner with the RFPI USA. He is author of the bestselling books, “Pwede Na! The Complete Pinoy Guide to Personal Finance” and “Pwede Na! The Complete Pinoy Guide to Retirement & Estate Planning.” He is Chairman and CEO of Personal Finance Advisers Philippines Corporation. This article does not constitute nor forms part of any offer or solicitation of an offer to buy or sell any securities. The opinion and views expressed herein are solely those of the author’s and do not necessarily reflect those of the Personal Finance Advisers Philippines Corporation.

[organizedchaos]

layo layo pa gyud ang pasko bai... naa pay semana santa... pero nice article... read it murag 2 decembers ago..

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Survey Says…

Efren Ll. Cruz, RFP®

(This article first appeared in Business Mirror.)

Since it is Christmas time, let me start off with a quick story about Santa and his reindeer. One day, an elf came up to Santa to ask for the names of all of his reindeer. Santa, the jolly man that he is, joyfully exclaimed, “Why, their names are Dasher, Dancer, Prancer, Vixen, Comet, Cupid, Donner, Blitzen and of course Rudolf - a total of nine.”

The elf replied, “But Santa, aren’t there ten reindeer? Look, there’s one more behind Rudolf. In fact, that’s the one that distracts Rudolf with his constant teasing.” After stroking of his beard and scratching his head, Santa replied, “Oh yes, that one. I have seen him before yet can’t seem to remember his name now. But I know it is Russian sounding.”

Let’s leave this Santa and reindeer story for the moment. All of us have distractions at work, whether we are employees or business owners. Typically, these distractions are financial in nature and blind us to the task at hand; pretty much like driving while texting. This assertion is backed by the financial wellbeing survey our company, the Personal Finance Advisers or PFA, conducted for our seminar participants during the second half of 2009.

The survey, which is under license from the Personal Finance Employee Education Foundation of the US, found that 68% of participants, most of whom were from Metro Manila, suffered from significant financial distress. Not surprisingly, the figure is higher than the 58% national average for the US. In a bit of good news though, only 19% of our seminar participants were in high financial distress versus the national average of 28% for the US.

Our survey also found that women were slightly better off than men in terms of financial wellness (i.e. 5.74 vs. 5.65). Financial wellbeing also usually takes a hit for people in the age bracket of 30-39 in which raising a family takes a heavy toll on finances. However, financial wellbeing begins to recover from the age of forty up to retirement age and dips only slightly thereafter.

People who have attained only a high school education also scored higher on the financial wellbeing survey than their college graduate counterparts (i.e. 5.81 vs. 5.55), proving that it is not what you get, it’s how you use it.

Last but not least, the survey found an increase in financial wellbeing with the increase in responsibility for others, especially for one’s offspring. The following are the results for this part of the survey:

Household Category

Financial Wellbeing Score

Single
single and living alone

4.85

single and sharing unit/house with unrelated adults

5.48

single and living with parents at home

5.55

single parent with children at home

5.85

Married
living with husband/wife/partner – no children at home

5.50

living with husband/wife/partner – with children at home

5.76

The correlation between responsibility and financial wellbeing can be explained by the motivation people get from having to fend for others; especially their own children (more so than their own parents).

Yet the question remains: what needs to be done in order to alleviate financial distress so that people can be better focused at work and at home?

At PFA, we employ a two-pronged approach to solving the problem of financial distress. One strategy has to do with introducing new beliefs about money: beliefs that will hopefully coach a person to take action on his financial situation. The other part is to provide the practical and Philippine-based CD-RW tools of personal finance management—where “C” stands for cash, “D” is for debt, “R” is for risk or insurance and “W” is for wealth management. Personal finance management must also be approached in the exact order of CD-RW. For example, a person should not jump into investing while he still has sizeable debts to pay. If he does, he would be taking additional risks on his money while his cash flow needs for covering his overhead (e.g. debt and interest payments) are still high.

Now back to the Santa and reindeer story. Santa finally remembered the last reindeer’s name. “Why yes, the name is Olov”, Santa gleefully said, “Olov, the other reindeer - used to laugh and call him names!”

May you enjoy the blessings of this season and healthy wealth for 2010.

Efren Ll. Cruz is a registered financial planner with the RFPI USA. He is author of the bestselling books, “Pwede Na! The Complete Pinoy Guide to Personal Finance” and “Pwede Na! The Complete Pinoy Guide to Retirement & Estate Planning.” He is Chairman and CEO of Personal Finance Advisers Philippines Corporation and Director of RFPI Philippines. This article does not constitute nor forms part of any offer or solicitation of an offer to buy or sell any securities. The opinion and views expressed herein are solely those of the author’s and do not necessarily reflect those of the Personal Finance Advisers Philippines Corporation.

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