It is again one of the most wonderful time of the year. You got your 13th month pay(Philippine mandatory additional compensation) and maybe some other bonuses and perks from your employer. Sale here and there and the temptation to go wild on your shopping is there. Hey it is just once in a year right? There is no problem buying stuff and spending for your love ones this Christmas but the bad thing is when you go beyond your budget and end up broke at the start of the new year(a bad start indeed).
So you should be monitoring your expenses so that you know where your money went. But that is too cumbersome and you are already tired with your gifts shopping. One creative way I myself practice is to asks for a receipt and keeping it.
Sounds weird but it is really of help in monitoring your expenses this Christmas. How can that be helpful you ask? Well we humans are technically visual creatures. We tend to get the idea if presented to us visually. That is why lots of advertisement are in the TV and we are easily drag into buying the product being advertised. Same with the things we get to see day-to-day. Over time what we see becomes who we are.
So how is asking a receipt be a help in monitoring your expenses?
Let me put it this way. If you have read about the story of the Richest man in Babylon(click here to read my posts about it) it is somehow the same concept of how you fatten your wallet/purse. When you buy something you lose your cash and have the product but your wallet becomes thinner. You need to replace the lost money in your wallet to keep it full. But since you are spending your 13th month pay there is no more cash to stash in your wallet. What did you exchange with your cash? The product/services you bought. But you can’t put that in your wallet so you need something visually representing that purchase and the receipt is just the perfect one.
As you buy stuff and put the receipts in your wallet/purse it will never go thin now since paper receipts are in it but in reality this receipts represents what you spent your money with. Now that you can see how thick it has become because of the paper, you will soon realize that you are overspending already because your wallet now has heaps of paper rather than cash.
Now to make it more effective why not put your wallet full of receipts in your pocket. As it thickens with paper receipts it will soon become heavy. For sure you will notice that. When that happens you should be reminded that you have been overspending already.
If yo want to make your wallet light again then you need to take out those paper receipts. What I suggest you do now is to find at least an hour and if you have a PC/laptop use a spreadsheet to tally your purchases. This way you will get the whole picture of where your money went(yes it did not evaporate to thin air). You can even classify each receipt whether it was used to buy a gadget, clothing, food, movie, gifts, or passes. You can sum up and see for yourself what was your biggest expense this Christmas.
Hope this tip helps you in keeping your finances healthy this Christmas and come out financially sound in the coming new year.
I suggest recording expenses every day of the year and comparing it with your income (a lesson from “Your Money or Your Life” by Robin and Dominguez). The goal is to keep expenses lower than income.
Anyway, my personal strategy is that I set aside money for Christmas starting October, then I count it as money “already spent” so I won’t feel guilty about giving it away as gifts.