Investors: How to Pay Off Your Holiday Shopping This Year!

The holidays are almost here, and the biggest shopping weekend of the year is already at our doorstep. Black Friday to Cyber Monday should be quite popular this year, as Canadians look to cut back on spending.

Yet there is a way to help with all those payments. While it’s a little late to create passive income that could pay for your items, you could certainly create enough passive income to pay off your items.

So, let’s look at how.

Budget, budget, budget

First off, before you even get into the holiday season, it’s important to have a budget in mind. Don’t go over a limit once it’s set, no matter how cute that little onesie is for your new niece or nephew (might be speaking from experience).

Instead, create that budget, stick to it, and even consider a Secret Santa-type option this year. This way, everyone can get something they enjoy, but no one blows the bank by spending on every single family member and extended relative.

But also, don’t only include purchasing in your budget. Instead, consider putting aside money for your investments. This should be part of your monthly budget no matter what’s going on, even during the holiday season. And by investing right, you could even create enough passive income to help pay off your holiday spending!

How it works

Canadian investors need to remember one thing, and that’s that dividend income isn’t the only means of passive income. Instead, include returns as well. If you’re able to find a dividend stock that has also been on the rise, then it’s a great way to create enough passive income to pay off your spending.

Let’s say you want to create $1,000 in passive income to pay off all your holiday spending. That would mean you need to invest enough cash now to create an increase in dividends for January when you’ll likely need to pay off your credit cards and debt, or at least pay yourself back. But you also want to look for companies that are on the upswing and perhaps due to jump after a strong holiday season.

That’s why today we’re going to take a look at the stellar option of Canadian Tire (TSX:CTC.A).

Get in while the going is good

Canadian Tire stock recently dropped during earnings, as the company looked to decrease spending as financial times remained tough. That being said, the company is due for a boost from holiday sales. Not just at Canadian Tire locations but those it’s acquired as well.

This could receive a huge boost in passive income for investors getting in now. Plus, you can therefore bring in a dividend yield of 4.89% as of writing, which comes to $7 per share annually. It also trades at a valuable 14.72 times earnings, with shares down just 3% in the last year. That should provide a quick boost back to normal in the new year.

So, if you’re looking for $1,000 in passive income, here’s how much you’d need to invest.

So, as you can see, it would take a $5,005 investment to even create more than $1,000 in passive income. You’ll have $245 annually, or $61.25, by the next payout from 35 shares. Further, you could create $1,650 when the stock reaches 52-week highs once more. So, happy holidays and happy shopping!