Hello Windfall, Goodbye
We were supposed to visit my sister and her family in Auckland last April, but this had to be shelved when the pandemic cancelled all travel plans for 2020 and beyond.
My airline offered to reimburse the plane fare or hold its value in a travel fund (adding 10% of the net amount to sweeten the deal), but I opted for the reimbursement because cash is always better than a travel wallet which we may not be able to use in the next 2-3 years.
The reimbursed plane fare was supposed to appear in my credit card within 5-6 billing cycles as a cash credit, so I charged all our household expenses and even gave in to a few splurges (i.e. clothes and books), all timed to drop on the sixth billing cycle. But no reimbursement came and I had to divert some of the funds intended for emergency funds towards credit card payment.
After several follow-ups with Philippine Airlines, the blessed day finally arrived. After ten months, I finally received the reimbursement for our cancelled plane tickets! Woohoo!
Barely a month after receiving the reimbursement, it's sadly down to 50% of its original value.
In my defense, about 80% of charges made towards the reimbursement were for household expenses (i.e. grocery, gasoline) and insurance premium payments. I did manage to sneak in a trinket and fancy pajamas for myself and we may have eaten out more often than usual, all because I had "free money" to answer for that.
I was also thankful that the reimbursement came when my husband and yaya's phones went kaput within a few days of each other. To paraphrase that catchy Lazada ad: "Bagong cellphone? May credit card reimbursement tayo para diyan!"
Now that my windfall is slowly dwindling away, I've made the executive decision of only using it for essential household expenses. Moving forward, splurges and non-essential household expenses will be paid for in cash to make me think twice about buying them.
A windfall is a great way to prop up your financial life, but only if you use it strategically and not fall into the pit of treating it as free money, like what I did.
I'm kicking myself a bit because I wasn't able to fully optimize the windfall (which wasn't technically a windfall because it was just a reimbursement). I usually plan for upcoming bonuses way before they arrive, allotting a good chunk towards debt payment or savings and then designating a small amount as fun money. I think the reimbursement caught me off guard because I was so happy to finally receive it that I wasn't able to plan how to spend it.
But I am enjoying my new necklace and my new pajamas feel so nice against my skin, so I don't totally regret my purchases.
I have to constantly remind myself that setting a financial goal is no reason to deprive myself of the little splurges that make me happy. It's all about balance and I now know that being too frugal for the sake of reaching my savings/investment goal, will only make me miserable and may even trigger rebound spending which will only derail my financial goals.
If you want to know how to better deal with and prepare yourself for a windfall, then I suggest reading this post.
Updated on February 18, 2021
Wouldn't you know it, on the day that I published a post on my pseudo windfall, I received a real windfall!
Yesterday, Metrobank announced that it would be issuing two types of dividends to its shareholders: regular cash dividends of Php1/ share AND special cash dividends of Php3/share.
I have cultivated my MBT shares through the years but this is the first time I remember receiving a substantial cash dividend (which goes to show how small my MBT holdings were these past few years). Of course it helps that the total cash dividends to be released are literally 4x more the usual, that's why it feels substantial
Unlike my recent reimbursement where I allocated a portion as fun money, I plan on channeling the entire cash dividend back into my portfolio and adding it to my March stock buying budget.
If you also plan on riding the MBT cash dividend train, be sure to buy MBT stocks by March 1, 2021 to receive the cash dividends because the ex-dividend date is March 2, 2021. If you buy from March 2 onwards, you will not be entitled to this batch of dividends and will have to wait until the next batch. Payment date is March 18, 2021.