Will You Be a Scrooge This Christmas?
When the miserly Scrooge from Charles Dickens’ A Christmas Carol is urged by his cheerful nephew to join their household for Christmas lunch, Scrooge declines with characteristic misogyny. What reason, he asks, does his nephew have to be happy when the celebrations will simply mean the expenditure of money he does not have?
Many of us may be hearing Scrooge’s words echoing around our heads as Christmas approaches. The cost-of-living crisis has impacted everyone in some way or another, and the coming year looks like it will bring renewed uncertainty. Should we, therefore, follow the advice of Scrooge and ignore the festive season?
Dickens sends three spirits to school Scrooge on the real value of Christmas, in the form of Christmas past, present and future. The Harpur Wealth team thought that we could provide our own wealth management spirits to help out with this Christmas, given that it might require a bit of financial management.
The Spirit of Christmas Past
What financial lessons could you draw from mistakes made in Christmases gone by?
- Buying to Impress. There’s an awful lot of ‘stuff’ that gets bought and given at Christmas, only to languish in a cupboard or be ‘re-gifted’ the year after. Think about what would be of real value to family and friends – normally these things cost very little.
- Panic-Buying. If you’re someone who leaves present buying until the last minute, you’ll probably spend far more than you intended to in a panic to get it done. Planning your gift-buying (there’s still a few days left), doesn’t bring on the adrenaline rush, and it’s far less costly.
- Christmas Trends. There are very few people who care overly about the environment in which they eat their family Christmas dinner. So long as the food is tasty, the cracker jokes awful, and the company good, there’s absolutely no need to spend a fortune on décor.
The Ghost of Christmas Present
Scrooge learnt from his Christmas spirits that giving to those with less makes Christmas mean more.
- Give Charitable Gifts. There are numerous charities vying for attention at Christmas. Why not donate instead of sending cards or agree as a family to include a charitable donation in the Christmas budget. Alternatively, you might choose to volunteer at a local food bank, or warm space serving food over the Christmas holidays.
- Bank the Bonus. For those of you that enjoy a bonus at this time of year, give some thought to the best way of using it. Perhaps talk to a wealth manager about how it could benefit your family over the coming years by being added to a trust, or your pension.
- Increase Everyone’s Wealth. Gift aiding charitable donations gives sports clubs or charities an extra 25p for every £1 you spend. If you’re a Higher Rate taxpayer, you’ll be able to claim back the difference between your rate and the basic rate of tax on your donation.
The Phantom of Christmases to Come
When Scrooge looks into his future, fear at what he sees is what makes him change his miserly ways. Contemplating the future may also make us change our financial habits:
- Don’t Waste Your Money. At Harpur Wealth we always start by asking our clients what their long-term dreams are; then we create a financial plan that will make those dreams come true. There’s no need to be a Scrooge, but focus on the things that matter to you, rather than expensive short-term treats.
- Give Children the Gift of Financial Planning. Helping your children to understand the value of money, and the wisdom of planning to achieve what you want, will benefit them through their lives. Why not make 2023 the year when you open their first bank account with them and give them more financial responsibility?
- Put Retirement Plans in Place. Whatever your age, planning for your retirement is a priority. It’s also a gift – to yourself. Planning your retirement brings its own joys; knowing that you’ll have the income to enjoy the lifestyle you want offers a very special peace of mind that you can carry with you all year round.
The Year Ahead With Harpur Wealth
When the spirits of Christmas past, present and future depart, Scrooge orders a massive goose and dances for joy in the street. We’re not expecting that our final article of the year will do the same for you, but if it has inspired you to discuss your financial future with a Harpur Wealth Management advisor, we’d be delighted to see you in 2023.
Happy Christmas to all, and a Happy New Year!
This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.
The value of your investment can go down as well as up and you may get back less than the amount invested.
‘The Financial Conduct Authority does not regulate taxation advice’