As Christmas approaches, you might be looking forward to watching your favourite festive films with loved ones.
Many of the Christmas classics have strong messages about the importance of family and community during the holiday season, but did you know that you could also learn crucial lessons about managing your wealth?
Here’s what three of your favourite Christmas films could teach you about financial planning.
1. Home Alone and the value of protection
Home Alone has become one of the most iconic Christmas films ever made. It tells the story of Kevin McCallister, a young boy who is accidentally left at home on his own when his family go on holiday over the festive period.
Unfortunately, two burglars attempt to break into the house and Kevin must construct a series of elaborate traps to keep them out. Hilarity ensues as the hapless criminals try and fail to get past Kevin’s defences.
Home Alone teaches a valuable lesson about the importance of protection. Kevin prepared ahead of time and so when a threat emerged in the form of two would-be burglars, his home was safe. Eventually, his family returns to find everything as they’d left it.
You may want to take the same approach to protecting your financial plan. For example, if you invest in income protection, you may receive regular payments if you’re unable to work due to illness or injury. This means you can continue paying your living expenses and working towards long-term goals.
Additionally, a life insurance policy could provide a lump sum for your family if you were to pass away. They may use this to pay off the mortgage or cover their general costs, meaning they can maintain financial stability.
Ultimately, putting protection in place ahead of time, as Kevin did when he set up his traps, means that you and your family are prepared for the unexpected.
2. Jingle All the Way and some important investing lessons
In Jingle All the Way, Howard, played by Arnold Schwarzenegger, is tasked with buying his son the year’s must-have Christmas present – a Turbo Man doll.
But, distracted by work, he leaves it until Christmas Eve and finds himself searching everywhere for the sold-out toy. The film follows his adventure through the city, competing with another last-minute shopper to find the doll.
While the main message of the film is that time with family is more important than material possessions, it also teaches some crucial investing lessons.
Firstly, Howard would have had a much better chance of success had he taken a more long-term approach and started his shopping earlier. The same is true of investing because, the sooner you start, the more time you give your wealth to grow.
Additionally, taking a long-term approach could help you ride out any periods of volatility because markets typically bounce back and continue growing over time.
Jingle All the Way also teaches the value of diversification and not putting all your eggs in one basket. Howard puts all his hopes on one toy shop having the item he needs, and when it doesn’t, he’s stuck. However, if he had given himself more options, his failure to buy the toy in one place wouldn’t matter so much because he could have picked it up elsewhere.
You may want to take the same approach to your investment portfolio and spread your wealth across various product types, industries, and geographical areas. That way, if some of your investments fall in value, you can offset these losses with gains elsewhere, meaning you may still be able to achieve your goals.
3. The Santa Clause and why you should always read the fine print
In The Santa Clause, Scott Calvin accidentally knocks Father Christmas off the roof, and when he goes to investigate, finds only the red suit, the sleigh, and a business card. The card tells him that should anything happen to Santa, somebody needs to finish the deliveries for the night.
Scott happily obliges but crucially, he doesn’t read the fine print, so fails to realise that he’s now duty bound to take over the role of Father Christmas moving forward.
His mistake demonstrates the importance of always reading the fine print and fully understanding what you’re signing up for, especially when it comes to your financial plan.
For example, you may be considering a pension transfer because you believe that a different scheme could offer more growth. Yet, it’s crucial that you check all the fees and charges you’ll pay because, if the costs are higher than those presented by your current provider, it might be more difficult to grow your retirement fund.
The same may be true when selecting investments as the management costs or transaction fees for certain products could vary significantly. There might be important stipulations to consider when using a cash savings account too. For instance, certain accounts require you to deposit a certain amount each month to secure the best interest rate, or give lengthy notice periods before taking out funds.
If you don’t read the small print and fully understand the financial products you use, you may find it more difficult to achieve your goals.
We can support you here by explaining complex financial topics in simple terms and perform due diligence so we can recommend the most suitable options for pensions, savings, and investments.
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If you need support in any of these areas of financial planning this Christmas and beyond, we can help.
Please get in touch or email us at advice@mlifa.co.uk for more information.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.