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The holidays are the season for gifts. Most people think of giving presents to other people, but this season you can feel even more rewarded by giving yourself monetary gifts.
It may not be flashy wrapping, but gifts like a solid shopping budget, a guaranteed investment certificate, and a low-interest balance transfer credit card can help you build a solid financial future.
1. guilt free boundaries
Everything goes up in price because of inflation. This can mean setting new boundaries for how much you can spend and not feeling bad about it.
Check the list twice
There’s no denying that giving gifts brings joy, but when you’re in dire straits, you need to rethink who you’re buying for. A distant cousin or auto mechanic who you see once a year likely wouldn’t expect a gift, so it wouldn’t hurt if you didn’t get one. increase.
set a vacation budget
Even if you only buy gifts for your loved ones, you still need to set a budget. That way, you can think more practically about the types of gifts you can buy. For example, let’s say your budget is $250 and you want to buy gifts for 10 people. That’s $25 per person. Of course, you can spend more money on one person, but you need to cut other parts. Defining your budget will help you make smarter holiday shopping decisions.
learn to say “no”
Holiday parties have been mostly absent for the past few years due to the pandemic. However, with most restrictions lifted, many are ready to host again. It can be expensive. Make peace with the fact that you don’t have the time, energy, or money to say yes to every invitation. It’s not a problem.
2. cash for your future
When setting your vacation budget, don’t forget to set aside some funds for yourself. Instead of buying physical gifts for yourself, consider cash gifts that can help with the household budget. please.
open gourd
All brick-and-mortar banks offer savings accounts, but they typically pay low interest rates and may limit transactions. To maximize your savings, consider opening a high-interest savings account (HISA) with an online-only bank. Digital banks typically offer higher interest rates and lower fees than traditional banks.
Opening an account is easy because everything is done online. Once your account is opened, you can link it to your regular bank and easily move money between accounts. If you want to take it a step further, you can set up automatic transfers to your high-interest savings account to save money on a regular basis.
buy GIC
In the second half of 2022, a Guaranteed Investment Certificate (GIC) will become a more popular investment option. Now that the Bank of Canada has steadily increased interest rates, you can find his 1-year GIC paying 5% or more. That’s even more than what high-interest savings accounts pay.
GICs are attractive because you don’t lose the principal of your investment. Depending on the type of GIC you purchase, interest rates may also be guaranteed. The problem is that many of his GICs are locked in, so the funds cannot be accessed until the full term is over.
3. Debt Service Plan
If you have outstanding consumer debt, be extra careful about adding it this holiday season. You can choose DIY-only gifts or no gifts at all. It doesn’t make you Scrooge. It just prioritizes your own debt-free future. You have several options when it comes to repaying your debt.
Get a low-interest balance transfer credit card
Some low interest credit cards have a balance transfer option. This can significantly reduce your debt by allowing you to transfer existing balances on your high-interest credit card to a new, lower-interest credit card. In addition, these balance transfers usually come with a limited-time promotional low interest rate, such as 0% for 12 months. If you focus on paying off your debt during this introductory period, you can significantly reduce the overall interest you pay.
apply for a line of credit
Another way to reduce your debt is to apply for a line of credit with a financial institution. The interest charged depends on your bank’s prime rate and your personal circumstances. That said, it’s likely to be lower than your traditional credit card bill. If approved, you can withdraw funds from your line of credit and immediately pay off any high-interest balance. You’ll be left with one payment at a lower rate, allowing you to reduce your total debt more quickly.
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Barry Choi writes for NerdWallet. Email: CAN-Editorial@NerdWallet.com
The three financial gifts to give this holiday season post first appeared on NerdWallet Canada.
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