When a Merry Christmas Leads to an Unhappy New Year Due to FINANCIAL DEBT

WWD

Christmas is near and I could rant about everything I hate about the season. I could think of heavy traffic and overcrowded malls. It's understandable if there are office Christmas parties. The bigger problem lies with people who end up wasting their paychecks all year round (read here). It's just a few days before Christmas and I can see the excitement. For some, they're all waiting for the gifts people have to give them and what to give to people. In the Philippines, it tends to focus on partying which is somewhat similar to the American view of Christmas. 

I could remember living downtown in Cebu City for a good portion of my life. There were neighbors who would party until dusk. I could remember huge crowds with their chatter together with loud music. Some people even hire a band to add to the merriment. Granted that some people have very little financial discipline. I'm not surprised that they would celebrate for the sake of celebrating. The mentality that they have loving fiestas too much (which was introduced when the Philippines was part of the Spanish empire as a distraction) is all-year. It's no wonder they try to be as festive as possible.

When Christmas arrives, there's really the mentality of "If it's bitter then just add sugar." (read here) played in full blast. How do they add sugar to the bitter? I could compare financial obligations to the bitter. Rather than try to work hard to make lemons out of lemonade--they just add sugar to the situation. They can figuratively and literally add incredible amounts of sugar. A lot of Christmas feasts tend to serve a lot of unhealthy food. The lechon or roasted pig (which is the star of the show) is not enough. They would have huge amounts of soft drinks and a lot of desserts. We can also have liquor to add to the mayhem. It's often said that people attend fiestas to "forget the problem". In reality, it just adds up to the problem. You can talk about buying expensive gifts one can't afford (which gives short-term happiness). You can talk about renting an expensive band to add that figurative sugar. 

What happens next is that December 31 is coming. It's New Year's Eve and they find out that they don't have money. With the same mentality, "If it's bitter then just add sugar." then you can expect more problems. They haven't finished paying the first debt. Now, it's time to borrow more money. The cartoon above is where a person says, "You can do it. Please reach the goal." and "Just a bit more." The end goal says "New Year". An expensive Christmas party was there. Now, the finances are piling up. The best "solution" yet again to "add sugar to the bitter" is to borrow more money. Is it me or is there joy in some people in borrowing and never returning the money?

December 31 arrives and similar stupidity happens. They decide to add more excessive sugar into the bitter in a similar way. The lechon arrives, the unhealthy amounts of desserts and soft drinks arrives, the expensive band arrives, the mayhem arrives, and they start screaming to have a good time. While they do so, they might be forgetting that they already owe several people. They think that their feasting will make them forget their problem. Instead, they will end up compounding their problem. Talk about soon having interest on their interest in the debt! In finance, that's compounded interest. Compounded interest is good on the investment but bad for the debtor. 

I remember the statements made by taxi drivers. I usually took a taxi where the jeepneys can't enter. I was laughing thinking about the taxi driver saying, "Somebody hasn't paid their debt." It was because an Indian guy, wearing a turban and riding a motorcycle, was there. I feel like saying that the song "Dayang Daya" (Cheating cheating) by the late Yoyoy Villame. Although Dayang Dayang seems to be Indonesian or Malaysian in origin, the song was mistaken to be Indian. I remembered hearing Dayang Dayang while eating in a Middle Eastern restaurant. I feel like the song "Dayang Daya" might play in full blast every January. It's because five-six lenders are eager to get the money back. 

The obvious case is no legitimate creditor (in the right mind) will give a new loan except if the old one was paid back. Banks will examine the financial history of those who borrow. Some people who overspend either have no bank account. It's either because of not opening one or their bank account was deleted due to a lack of balance. The "solution" is to get loans from where it's the easiest such as five-six lenders. That's why every time I drive around and see an Indian riding a motorcycle, I end up saying to myself that someone has debt to pay. Though, that was nothing but speculation since that Indian guy riding a motorcycle might just be delivering spices to a customer.

As Christmas approaches (and I remember my first cheerless Christmas due ot Odette), I'd like to write this post as well. It's more than time to think about how we manage money. What do you plan to do with your Christmas bonus and 13th month's pay? How do you plan to celebrate Christmas without getting buried in debt? Those are very important questions to ask yourself.