It’s safe to say that Christmas is going to look a whole lot different this year. With COVID-19 affecting all aspects of our lives, from limiting how many family members we can see to impacting how much we can afford to spend, it’s a given that we’ll all have to adapt to a ‘new normal’ this Christmas.
A reader reached out to me last week in regards of Christmas spending. One thing we have to keep in mind this is not normal timing. Covid-19 took the whole year away from us. With countless of life lost and many still in the hospital. We are all searching for something different this Christmas. Love and kindness is very important right now. We can be together while social distancing, call as often as possible voice and video. And a little encouragement goes a long way now these days.
Giving is a wonderful thing, putting smile on other people faces is the reason why the earth keep rotating. In time like this it’s hard not to give out a little in your savings/investments. Infact people who started this journey with me should be rejoicing right now as they can safely buy much of what’s in their shopping list with Dividends.
While thier stocks grows in value touching the dividends to bring joy to thier love ones won’t change the outcome of the upcoming ones. All one need to do is figure out how much exactly you are going to spend try not to go overboard nor rely on credit cards. It’s really good to cheer others but first and foremost don’t put a burden on yourself.
The best gift to give is a gift that keeps on giving. A gift with value, for instance help with tuition fees. Help with debt or create account for the little ones both saving and investments. For anyone looking to make someone happy remember not to touch the capital because once you do that you change the whole game.
If you dicide to open investments account for kids or grandkids, it’s a wise move because if you invest that money in an index fund I always go with the S&P 500 which can easily bring back a return of 10% annually if not more. Now let’s say you open that account with $5000 that’s $500 annually. Plus compounds interest, it’s safe to say an investment like that will bring great rewards in about 10 to 25 years.
Money doesn’t grow on trees but parents and grandparents can set a great foundation for their kids and grandkids. Remember the earlier you do this the more they can rip from it, of course that little ride on car sure looks good but for how long they going to use it?
One other beneficial gift is college funding accounts, they are great it’s like paying for school before they get expensive. I call them boomerang because regardless if the kid go in state or out of state the money will apply. And if the kids decide not to go to college you’ll get your money back.
Don’t go overboard on your savings this year trying to get the perfect gift. There’s no reason why the festive season can’t still be joyful! Spend responsibly!