9 financial-savvy tips for Christmas gift-giving

The holiday season is now in full swing.

There are Christmas parties to attend, gifts to buy, and homes to decorate. Most businesses, particularly retail, will earn the bulk of their yearly earnings in this final quarter.

On an individual level, this means that the average Filipino will spend significantly more in December than in the previous 11 months.

With this idea in mind, I thought it would be fitting to ask some of the personal finance experts in the Philippines for their advice on making it through the Christmas season without breaking the bank.

The Christmas spirit, after all, does not necessarily correlate to how much a person spends – in other words, you can be festive without being wasteful.

Here are their words of wisdom:

1. Practice re-gifting. Blogger and entrepreneur Fitz Villafuerte recommends that Christmas gift-givers try re-gifting – giving an unwanted gift that they received to someone else. “Not only will that item find a more suitable owner, but you’ll also get to save some money,” he said.

Re-gifting can be done in good taste. “Remember to be good and sincere with your intentions,” Villafuerte emphasized. “Only give items that you believe the recipient will like and appreciate. Re-gift items that are complete and in good, working condition. Unopened and unused items are ideal.”

Villafuerte advised against re-gifting anything personally handmade by the original giver or promotional items like corporate giveaways. “Moreover, being honest can also work,” he said. “Tell your friend about a gift you got and ask if he or she would like to have it instead, as a gift from you. If they really like the item, they won’t mind if it’s ‘second-hand.’”

2. Buy local gifts. Investor and financial advisor Burn Gutierrez emphasizes this tip for balikbayans in particular. “Most of the ‘stateside’ goods that you will buy abroad are most likely available anyway in the Philippines,” he said.

“Or why not go Pinoy instead?” he suggested. “There are so many locally-made products that are at par or even much better and cheaper than imported ones.”

Gutierrez said you can even make a bonding event out of the experience. “Bring your family with you instead at the supermarket or department store and have fun with them in choosing the cheapest quality brands that you need from the shelves,” he said. “But don’t forget to make that Christmas ‘needs’ list first!”

3. Make your gifts or give your time as a gift. Bestselling author and entrepreneur Ardy Roberto recommends you try your hand at making hand-made gifts.

“Make gifts that have been made with tender loving care from your kitchen or work table. A homemade card, handmade shirts (someone gave me a hand painted shirt with her hand prints and I treasured it) or homemade food items from your kitchen will be very much appreciated,” he said.

As an alternative, Roberto also suggested that you can provide “services” as a gift. “You can also offer to spend time with a relative or friend and bring a homemade dish – that would be your gift,” he said. “Or you could give a gift certificate to the parents of your inaanak (godchildren) offering one or two ‘babysitting’ days when you would look after your inaanak, so that they could go out on a date or vacation.”

4. Avoid impulse purchases. Christmas is ripe with opportunities to make impulse purchases. You have your 13th month pay in your pocket, there are many Christmas sales going on at the malls, and there are many loved ones that you want to buy presents for.

Financial adviser and planner Argel Tiburcio encourages Filipinos to keep their emotions in check. “Always remember that people buy with their emotions and then justify what they bought with logic,” he said. “When tempted to buy something deeply discounted, keep calm and ask yourself first if you really need it.”

5. Be a ‘Secret Santa.’ Buying gifts for everyone in a social circle can get expensive, so personal finance educator J3 Patino recommended doing a Secret Santa gift-giving.

He explained it in detail. “Write everyone’s name in a separate piece of paper, then you just draw lots on who gives a gift to whom,” Patino said. “So for example, let’s say you have a barkada (group) of 5 people, and you would usually spend P200 ($4.47) per gift totaling to P1000 ($22.35).”

In addition to encouraging better, more personalized gifts, Secret Santa can dramatically cut down on expenses. “When you do the Secret Santa, you can set the budget for the gift at P500 ($11.17) instead. So this immediately cuts everyone’s gifting expenses by half!” Patino said.

6. Realize: the best gifts aren’t always the expensive ones. Financial literacy blogger Jill Sabs has a sharp personal philosophy when it comes to gift-giving. “One thing that always guides me with Christmas shopping is knowing that there is no such thing as the perfect gift, so I don’t stress myself over getting that one shining present that will boost me to goddess status in the receiver’s eyes or mend whatever differences we have,” she said.

“Gifts are tokens of love or appreciation, and those are never synonymous with a high price tag,” Sabs continued. “For example, I know that my niece likes to putter around the kitchen so I got her a chocolate mold tray to encourage her interest. It might be trite, but it’s really the thought behind the gift that matters.”

Personal finance coach Randell Tiongson echoed these sentiments in a recent blog post. In it, he calls on Filipinos to stop equating the cost of a gift with the value we hold to the person we give it to. To him, this requires fighting against cultural pressures and trying to make more logic-driven purchases.

7. Practice year-round gift-giving. Perhaps some of the pressure to give lavish gifts like gadgets lies in the fact that the Christmas season is one of the few “sanctioned” times to do so. Investment adviser and bestselling author Efren Cruz wants to challenge this thinking, so there is less of a cultural compulsion to buy expensive gifts. 

“Christmas is not the time for giving; the whole year is,” Cruz said. “It is very difficult to give when the act of giving has not yet been embedded in your system. And the only way to make giving a part of you is to do it regularly in bite sizes (so that it also does not drain you).”

8. Save, even if it is Christmas. After giving a talk to about a thousand police officers in Cebu City, motivational speaker Jayson Lo was shocked to discover that the majority of them still did not have a savings account. He thus challenged them to deposit a minimum of P5,000 ($111.73) from their 13th month pay into a newly created savings account.

He then generalized this tip to all Filipinos. “My advice this Christmas season: place at least 20% of your bonus in the bank. If you can put 50% of your bonus – excellent! If you can put all 100% in the bank, I would call that a miracle,” Lo said, before adding, “But mind you, I believe in miracles, and I believe you can do it.”

9. Start investing. Financial literacy blogger Kristine Licuanan argues that there’s no better time to begin investing than during the Christmas season – the end of the financial calendar.

“Think: All year long, we are actively working to earn our wages,” she said. “This time, why not make our money work for us? Try to read related articles about investing in mutual funds and the stock market. For as low as P5,000 ($111.73), you can get started.”

Financial consultant and entrepreneur Marvin Germo agrees. “We have to consider that our bonus money is an excess and we could live normal lives throughout the year without it,” he said. “It should rather be used to build on wealth for the long-term. It does not mean we do not enjoy our money but it means we invest on assets first and then spend on things that depreciate in value second.”

As an example, Germo said that he thinks of his long-term financial goals before making any purchase, such as saving for retirement and the college tuition of his kids. “After my long-term goals, I would then look at my budget and see if there are any ‘short goals’ that I need to add into or financially fulfill first,” Germo said. “After going through all my needs and my long-term financial goals that is when I spend on my wants.”

Germo believes that saving and investing are things that all Filipinos can accomplish. “I want to see more Filipinos enter 2015 with more savings and investments like never before,” he said. – Rappler.com

Rappler Business columnist Ezra Ferraz is also the chief content officer at ZipMatch, a tech company backed by Ideaspace Foundation, Hatchd Digital, IMJ Investment Partners, and 500 Startups. He brings you Philippine business leaders, their insights, and their secrets via Executive Edge. Connect with him on Twitter: @EzraFerraz



*($1 = P44.75)

 

Credit cards and terminal image from Shutterstock