Since its publication in 1843, A Christmas Carol has become one of the most beloved seasonal tales of all.
Whether you enjoy Alastair Sim as Ebenezer Scrooge in the 1951 film classic, or you prefer your Dickens with the lighthearted touch of the Muppets, you’ll likely know the story of the miser whose life changes after he is visited by four ghostly apparitions on Christmas Eve.
While the novella has been credited with inspiring many of the things we consider traditions at Christmas – from seasonal food and drink to a festive generosity of spirit – it can also be an instructive way of thinking about your own financial plan. Here’s why.
The Ghost of Christmas Yet To Come
The final ghost that appears to Scrooge is the Ghost of Christmas Yet to Come.
This spirit shows a Christmas Day in the future where local businessmen attend Scrooge’s funeral only on condition that they are provided with lunch. When Scrooge asks the spirit to show a single person who feels emotion over his death, he is shown the pleasure of a poor couple who rejoice that his passing gives them more time to put their finances in order.
Sobbing, and having seen what his future looks like, the miser pledges to make significant changes to his life now.
He awakes on Christmas Day a changed man, making a large donation to charity and anonymously sending a large turkey to the Cratchit home for Christmas dinner.
But what does Scrooge’s epiphany have to do with your financial plan?
Financial planning starts with working out what “future you” looks like
Imagine a spirit transporting you so you could see yourself 20, 30, or 40 years from now. What would you hope to see in those scenes?
The answer to this question will be different for everyone, and specific to you. You might see yourself in a far-flung part of the world, enjoying a long-awaited trip. You might be successfully running a business that’s grown from one of your passions. Or, you might see a home filled with family enjoying their own Christmas dinner.
Without thinking about what you’d like your Yet To Come to look like, it’s hard to make plans to get there.
It’s why all our financial plans begin with you thinking about what you’d like to achieve in the future.
These might be short-term goals, such as helping your children through university, moving home, or setting up your own business. Alternatively, you may have longer-term objectives such as retiring early or a “bucket list” of things you’d like to achieve in later life.
A major report by Aegon concludes that: “When we have a concrete picture of our future self, it becomes easier to make long-term plans and stick to them.”
Despite this, just 1 in 4 (28%) people have a specific picture of what their future self looks like.
Scrooge was able to make significant changes to ensure that his future didn’t turn out as predicted. If you know what your own ambitions are, you can make similar changes now to get there.
Cashflow planning is your Ghost of Christmas Yet To Come
While we don’t employ a spirit that can whisk you into the future, we do have a way of helping you see what your future self looks like.
Cashflow modelling software lets you see your future financial position. We input variables such as your income, asset values, and your outgoings, and make assumptions for inflation, investment returns and so on. The end result is that you can see how your wealth might look in years to come.
It shows you in black and white whether you’re likely to run out of money in later life, or whether you’re on track to achieve the level of income you want to maintain your lifestyle. It can also show you the impact of, for example, making a gift to a child now to help them onto the property ladder.
For many clients, seeing their future financial position in black and white can be a “light bulb” moment.
It can give you the confidence to retire, knowing you’re unlikely to run out of money. It can also enable you to provide support to family, secure in the knowledge that it won’t hinder your progress to your own goals.
You might even realise that you are well on course to achieve your goals and that – just like the Dickens character – you can afford to become more philanthropic.
Just as Scrooge was able to gain redemption armed with information about what his future held, seeing what your own later life looks like can help you to make informed decisions now that will help you to meet your own goals.
Get in touch
If you’d like to find out more about how creating a bespoke financial plan can help you to achieve your Yet To Come, please get in touch.
Email firstname.lastname@example.org or call us on 01454 416653.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate cashflow planning.