Home > UTC Media Centre > Investment Segment > UTC Investment Segment – Budgeting & Investing for Christmas 2012

October 31st, 2012

UTC Investment Segment – Budgeting & Investing for Christmas 2012


For the unprepared, Christmas can come at a high price. Between gifts, wrapping paper, parties and impulse buying, Christmas can spell financial ruin even for the most savvy of investors.   With intelligent cost cutting and creative thinking, Christmas does not have to be a drain on your wallet.

Unfortunately, many people end up dreading the Christmas season simply because it often means incredible amounts of debt and financial stress. And in a world where investors are bombarded with financial and economic stresses, there is really no need to add to the burden.

The biggest reason people implode financially during Christmas is failure to plan and budget.Many times it is difficult to remember exactly how the money was spent, and often times this money is wasted on frivolous purchases. Setting and sticking to a Christmas budget will ensure peace of mind and allow investors to stay out of the red.

So where do you start?  The first step is to make a list, as simple as this sounds this is crucial to setting the stage for the Yuletide season.Once you decide who is deserving of a gift, determine how much money you can realistically afford to spend. Then, designate a set portion of the total amount for each person on your list.

For example, let’s say you have $600 to spend, and you need to buy gifts for ten family members and five friends. You may decide that you’ll spend $40 on each person on the list. On the other hand, you may want to spend $50 on each of your family members and $20 on each of your friends. No matter what, stick to your initial budget to remain solvent.

In addition, spending your hard-earned income on elaborate decorations and exquisite food and beverages is commonly rationalized as being in the festive spirit but all this will do is saddle you with more debt. Rigorous adherence to a budget can lower debt, increase funding for investment accounts and reduce the overall stress associated with this time of year.

Unfortunately, many holiday shoppers let their emotions get the best of them, and they end up overspending.  Not only will overspending break your budget, but it will also deplete your finances and ruin your chances of achieving your priority financial goals.

Anotherproven strategy for making Christmas less expensive down is refusing to go into debt via the credit card. Simply put, there is no defensible reason to spend money you don’t have on Christmas. As tempting as the use of your credit card is for shopping, its use should be judicious and not be used in reckless manner as profligate spending will derail your well-intentioned plans. One way to force yourself to stick to your holiday budget is to pay for all your gifts with cash. Simply withdraw the amount that you can afford to spend on your holiday gifts, when that money is gone, Christmas shopping time is over.

As an investor at Christmas, it would be prudent to give financial gifts that would assist in improving the financial well-being of family and friends. Cash gifts do not have a lasting value because the money is quickly spent and toys and gadgets can quickly become obsolete in today’s technology obsessed society.

A good way to introduce relatives and friends to the world of investing would be giving a gift of units into any of UTC’s funds, namely UTC Universal Retirement Fund to motivate those who are in dire need a retirement option, or by opening a UTC TT $ Income Fund for the beginner investor. For the more sophisticated family member, there is the Growth and Income Fund family where the investor has the potential to earn capital growth and dividend income.

In this way, you can ignite the savings habit and create an investment mindset for relatives and friends and introduce them to the concept of diversification.   Such actions can go a long way towards putting them on the path to investing and assist them in attaining some measure of confidence in improving their financial health.

For family members with young children, the ideal gift would be the Children’s Investor Starter Plan (CISP) or the Student Investment and Protection Plan (SIPP) that could put them on the road to financial independence and provide an appreciation of the benefits of long term investing.

Giving a gift of high-quality bonds via bond or income funds, such as the UTC’s Global Bond Fund and UTC’s US$ Income Fund is an excellent Christmas gift for family members who already know the rudiments of diversification and attuned to the global investment environment.  These would truly be gifts that keep on giving so that no one could accuse you of being a “Scrooge” or a “Grinch”!

Good Christmas budgeting may seem like a humbling or constricting endeavor but it can actually be very enlightening in that it can lay the groundwork for ensuring the financial future of relatives and friends. Once you follow the above principles, you won’t be saying “Bah humbug” when the Yuletide season arrives.