Investment; setting you up for a future of financial freedom
Following on from “Tips to avoid a holiday spending hangover” our latest pre-Christmas gift comes in the form of money saving tips and advice to prepare you for all that encompasses the Christmas season and beyond. Emphasis on the beyond.
Black Friday sales behind us, we can now plan ahead to Christmas, the expenses involved, and for many kiwis the imminent backlash of heading into the New Year ‘in the red’. A debt consolidation loan is one option to take for the under-prepared and can work wonders to help you organise and manage financially in the early stages of 2019. More on that here, here & here.
Back to the purpose of this piece; preparing you for a future of financial freedom through a measure of savings options and sound investment strategy. Add a prescription of improved money management habits and our patient – the everyday New Zealander will now be equipped with the sufficient resources necessary to remedy any future hiccups. Finance hiccups that is.
Before we go any further, we need to assess our options. Keeping it simple we will present the case for savings accounts and term deposits. To determine What’s the best fit for you? Savings account vs term deposits.
Let’s start with a Christmas Saver account:
NZCU South offers a Christmas Saver account dedicated to your savings needs, helping kiwis afford the special things over the Christmas and holiday period. The idea is simple, and no different to other schemes retailers offer with their Christmas based incentive programmes. The benefit here is an incentive to save with the fostering of good money management habits throughout the year. It’s important to note that the saver account is locked between 31st January until the 20th November each year with funds unavailable for access during this time.
Which brings us to Investing;
Deciding whether to save or invest is a personal choice and a matter of preference. If you have a Christmas Saver account, you are already familiar with the practice of separating yourself from a set amount of your equity over a continued period of time. This is not too dissimilar from the idea of investment.
Good things come to those who wait right? By resisting the temptation to spend now, instead, putting a lump sum aside in a term deposit, you are presenting yourself an opportunity to meet future financial goals. It could be the purchase of a new vehicle, an overseas holiday or a deposit on a home loan. Or even a chance to better prepare for your next Christmas, or multiple Christmas’ ahead. A decision to invest is a strategic one. One that rewards the patient, long-term planner and sets you on a path to achieve your long-aspired personal finance goals.
You do not have to start big either. NZCU South offer term deposits for investments of $500 to $500,000 and for terms ranging from 1 month through to 36 months. Remember, the greater the amount you invest and the greater the term (length of time invested) the greater your ROI (return on investment) will be.
In comparison to a general savings account; you will earn interest on your savings account, but, in general a term deposit will offer a greater interest rate and return on investment than the savings option.
Bringing it back to Christmas & the holiday season:
You may not be fully prepared for this Christmas, but there is no reason why you cannot make the steps necessary to ensure future Christmas’ down the line are managed through better saving and investment strategies. For many, Christmas is a time for New Zealanders to ramp up the credit card spending. Often placing us in a vulnerable position financially, following the holiday period. To avoid entering a debt cycle, investment can act as an additional source of income to counter the increased spending output.
Upon maturity, your invested fund has grown through little effort of your own. In a stress-free, low-risk means. Allowing financial freedom and control of your spending at what is traditionally an expensive time of the year.
For more info regarding term deposits and investing, be sure to check out our Investment rates, info & options at: