What the Griswolds Can Teach Us About Our Finances

The holidays can be an exciting and joyous occasion, or they can be filled with stress and anxiety, depending on how you prepare for them. But, using the Griswold’s situation in “National Lampoon’s Christmas Vacation” as a learning experience, you can take some steps to make the holidays a bit more bright. So, grab some eggnog and your moose mug, and consider the following tips to, hopefully, ensure a smoother holiday season:

Make decisions together | Before making any major purchase, be sure to speak with your spouse first to avoid potential conflict. This could include asking their opinion on installing a pool or purchasing gifts for other people’s children. Financial disagreements account for a great deal of marital strife, so clear communication is imperative.

Don’t write a check you can’t cash | Or, as the saying goes, “don’t count your chickens before they hatch.” By relying on a source of income that you haven’t yet received, you put yourself at risk of financial catastrophe. For example, if you decide to put in that pool I just mentioned, make sure to wait until you receive your bonus check.

Make sure you have an emergency reserve | Should the unexpected occur (for example, getting fired after kidnapping your boss – we don’t recommend this), it is important to have a liquid source of funds available to meet your monthly expenses until you’re able to recover. This account is normally recommended to cover approximately 3 – 6 months’ worth of expenses.

Save some of your year-end bonus | While bonuses can be a nice surprise and should definitely be enjoyed, you should consider saving at least a portion. This could mean padding your emergency reserve, paying down high-interest debt, depositing money to a brokerage account, or contributing to an IRA.

Review your insurance coverage | This includes disability insurance should a loved one take a tumble off the roof while hanging lights, homeowner’s insurance in case your house is destroyed, car insurance should you wreck while narrowly avoiding a runaway sled, liability insurance if someone gets hurt (yourself or others), and health insurance if holiday planning causes high blood pressure and puts you at increased risk of a heart attack.

Keep your estate plan up-to-date | Should one of your family members make the unfortunate decision to light a match in the vicinity of flammable material and the worst were to occur, it is imperative you have current legal documents. These can help ease the estate distribution process and reduce family conflict in an already stressful time.

Consider pet insurance | If your feline (or canine) companion chews on a cord and gets electrocuted, chances are, the vet bill will be fairly high. Much like human health insurance, pet insurance allows you to set deductibles and co-insurance based on an agreed-upon monthly premium. While not cheap, in circumstances where your pet requires more expensive care, this coverage can help greatly reduce the cost of your vet bill and save you money in the long run.

Give to charity (or family) | It truly is better to give than to receive1. Whether it’s helping those less fortunate or purchasing gifts for family members who don’t have the funds, the joy of helping others is priceless. Also, if you decide to give to charity, you may receive the added benefit of a potential tax deduction.

Before hosting your next family gathering, you might want to consider having your overall financial plan reviewed and can help you determine the best course of action.

 

1 Science Magazine; March 20, 2008

 

Opinions expressed are those of the author but not necessarily those of Raymond James, and are subject to change without notice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Potential are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions for federal and state tax purposes. Raymond James advisors do not offer tax or legal advice.
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