December 20, 2021
Who doesn’t love watching holiday movies this time of year?! My wife and I try to watch as many holiday movies as we can. There’s just something so nostalgic about settling into a Christmas movie and reminiscing about your own family traditions. Christmas movies are filled with tomfoolery and hilarious hijinks, but they also remind us that the importance of the holidays, or life in general, is spending time and creating memories with the people we care about most.
With that said, I can’t help but notice the reckless financial situations our favorite holiday movie families seem to find themselves in, and I thought it would be fun to share the financial planning topics I would cover with them if they were 2Point0 clients.
Boring disclosure time: I obviously don’t know enough about these characters, nor their financial situations, to give any kind of real financial advice, but they’re fictional and it’s the holidays so I thought we could have some fun. Just relax and enjoy the article, cool?!
Quick note: You’ll notice a popular family was left off this list. Don’t worry, you can read about them here: If I were the McCallister’s Financial Planner
I need to start by mentioning that this is my all-time favorite Christmas movie. I watch it several times a year and ruin the movie for anyone watching it with me as I quote the entire thing.
The Griswolds are my kind of people, but they have some areas that need attention from a financial planning standpoint. I’d definitely start with insurance.I tried to narrow this down to one particular area of insurance, but this family, specifically Clark, seems to be quite accident prone, so we’d really need to cover all our bases. I’d start by reviewing Clark’s employer healthcare benefits. For someone who is on the cusp of being seriously injured throughout the entire movie, I would feel obligated to make sure the inevitable hospital bills wouldn’t financially ruin the family. Most families are unprepared for the possibility of being disabled and unable to work (the statistics are staggering: if you are 35, you have a 50 percent chance of being disabled for 90 days or longer before you turn 65). I would have to assume that Clark is going to land in the higher-than-average category here and should be insured accordingly. While we’re at it, we would review all their other insurance needs like property, casualty, life insurance, long-term care, etc.
I’d also review the family’s cash flow. They are heavily dependent on the Christmas bonus from Clark’s employer, so I would want to discuss ways to smooth out that cash flow so they wouldn’t be so stressed and frantically checking the mail to make sure they have enough money to cover the generous gifts they buy.
Like a lot of folks, Scott Calvin came to the realization that the values of his employer didn’t align with his personal values. Scott was a highly paid executive at a toy company when he was presented with an opportunity to pursue a different path. We call this “retirement planning,” but really, it’s about planning for Scott’s life.I’d spend time talking to Scott about what’s really important to him, and I’d guess we’d spend a lot of time talking about his son, Charlie. If we dug into that, we’d realize Scott doesn’t get to spend much time with Charlie because of how much he’s working, and maybe he’d like to consider this new career opportunity where he would get to be more involved in Charlie’s life and his work would be more meaningful.
If Scott decided to take that new job, we’d look into the employer benefits and make sure he was taking full advantage of the benefits offered. We’d also discuss his options with his old 401k.
Noelle is a little newer (it came out in 2019), so maybe you haven’t seen it yet, but it’s about the Kringle family dealing with the transition of the family business after Santa passed away. The expectation had always been that his son, Nick, would takeover and assume all the responsibilities of being Father Christmas. Ultimately, however, the stress became too much for Nick and he realized he never wanted the family business. Fortunately for all the children of the world, Santa’s daughter, Noelle, stepped up and filled the position with expertise and grace.
From a planning standpoint, if you have a business, it’s important to have a succession plan in place. This can be a part of a larger estate plan. In my opinion, having the plan in place isn’t nearly as important as making sure the people involved understand your wishes. Just because you want someone to take over your business when you pass away, doesn’t mean they want your business. They also may not have the same vision for your business as you do, so it’s important to make sure these wishes are articulated.
Beyond succession planning, your estate plan should be expressed to your family. An estate plan involves others, like the people who will make medical and financial decisions on your behalf in the event you become incapacitated, so it’s good practice to discuss your final wishes with the people who will be involved.
I hope this post was entertaining and educational.At the end of the day, the holidays highlight the things that are most important to us. At 2Point0 Financial, we believe you should strive to spend as much time as possible doing the things you love with the people you love, and that’s what this time of year is all about. As you look around while you’re celebrating this year, make sure the people around you are factored into your financial decision making.
You wouldn't wait until the morning of a flight to plan a trip.
Don't wait until retirement to make a financial plan.