3 financial planning lessons from the ghosts of your past, present, and future 

There are few better-known Christmas stories than A Christmas Carol.

From the Muppets to Blackadder, Bill Murray to Jim Carrey, Charles Dickens’ 1843 novella has been retold and reimagined countless times.

As wealthy miser Ebenezer Scrooge is forced to confront his past, present, and future through the apparition of three spirits, the story conveys a clear message about the perils of greed and the joys of sharing your wealth.

What’s more, the narrative illuminates the relationship between your past, present, and future in defining your financial behaviours. Not only are today’s decisions influenced by your financial past, but they can also have lasting impacts on your financial future.

So, if three financial spirits were to visit you tonight, what might they tell you? Read on to discover three financial planning lessons you could learn from the ghosts of your past, present, and future.

 

1. The Ghost of Christmas Past: Overcome your “scarcity mindset”

After the ghost of his late business partner, Jacob Marley, warns Scrooge that he will be visited by three spirits, the first to appear is the Ghost of Christmas Past.

The spirit gives Scrooge a glimpse back into his youth, and Scrooge sees himself as a poor, lonely child in a cold schoolhouse. Also revisiting his early adulthood, Scrooge is reminded that his pursuit of wealth led to the end of his engagement to his fiancée, Belle.

As the spirit shows Scrooge these scenes from his past, it becomes clear that his financial struggles in early life taught him to scrimp and save – behaviours he continues to exhibit despite his wealth.

If you grew up with scarce financial resources, it’s not uncommon to develop a “scarcity mindset”. This is an inherent belief that resources are limited, which often leads to financial stress and overly restricted spending, even if you have ample wealth in reality.

This mindset can have a profound impact on your relationship with money and, consequently, your lifestyle and mental health.

As with Scrooge, the instinct to avoid spending and save every penny can severely limit your enjoyment of your wealth. For example, you may be less likely to treat yourself to occasional luxuries, enjoy holidays, or give gifts to loved ones.

By contrast, an “abundance mindset” places more focus on opportunities to achieve your goals. Rather than cutting costs to an extreme level, you might focus more on investing, earning, and other means of growing your wealth.

So, by adjusting your mindset to focus on positive opportunities, rather than fearing scarcity, you may be able to enjoy and share your money more easily, while continuing to grow and protect your wealth.

 

2. The Ghost of Christmas Present: Create a holistic financial plan

The second spirit to visit Scrooge is the Ghost of Christmas Present. As he witnesses Christmas Day in the home of his clerk, Bob Cratchit, as well as his nephew, Fred, Scrooge realises how his miserly behaviour is affecting those around him.

By giving insight into the present day beyond his own life, the spirit helps Scrooge to see the bigger picture and realise how his pursuit of wealth has also impacted his own happiness.

Likewise, by taking a step back to consider your entire financial picture, you may be able to identify opportunities to enjoy, protect, and grow your wealth.

Creating a holistic, comprehensive financial plan can help ensure all areas of your finances are working together, and nothing is neglected or forgotten. From cashflow modelling to estate planning, a financial planner can help you gain a clear view of your current financial circumstances.

Once you have a full picture of your income, assets, and outgoings, a financial planner can also help you devise a strategy to achieve your future goals. So, you can enjoy your wealth without fearing future consequences.

 

3. The Ghost of Christmas Yet to Come: Prepare for the future

Finally, the Ghost of Christmas Yet to Come offers Scrooge a glimpse into the future. The spirit shows him the continued poverty of the Cratchit family, which ultimately leads to the death of their youngest son, Tiny Tim.

Scrooge also sees scenes following his own death, wherein the locals celebrate his passing. These visions ultimately lead to Scrooge awakening in the present day, enthusiastic to change the future (and his own behaviour) before it’s too late.

While there are no spirits to show you what lies ahead in your own life, you may be able to predict your financial future based on your current circumstances.

By using cashflow modelling, you can create a detailed picture of your finances, providing a year-by-year forecast of your financial situation.

Then, using this information and assessing how your money is earned, spent, saved, and invested today, a financial planner could help you visualise where your finances are headed tomorrow. You can test out different budgeting decisions to evaluate how they might impact your future, as well as how you might be affected by varying investment returns or inflation levels.

Much like Scrooge, you can foresee what’s to come and make changes in the present to help secure the future lifestyle you’re dreaming of.

 

Get in touch

Whether you’re looking to overcome a scarcity mindset, to get a clearer view of your finances with a holistic plan, or to prepare for a comfortable financial future, get in touch to find out how we can help with your past, present, and future finances.

Email info@chancellorfinancial.co.uk, or call 01204 526 846 to speak to an adviser.

If you’re already a client here at Chancellor, contact your personal financial adviser to discuss any of the content you’ve read in this article.

 

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning or cashflow planning.

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.