The Most Wonderful (and Expensive) Time of the Year
The holidays are full of joy — family gatherings, good food, gifts, travel, and the occasional fruitcake. But they also come with a unique mix of emotions that can spill over into our financial lives: excitement, generosity… and sometimes, a little guilt.
In behavioral finance, we call this the “holiday bias” — when emotion drives spending and decision-making more than logic. It’s the same instinct that convinces you to buy the “perfect” gift, even if it blows the budget.
This season, let’s take a few lessons from the holidays themselves — and see how Santa might actually make a pretty good financial planner.
Make a List (and Check It Twice)
Santa doesn’t wing it — and neither should you.
Before you spend, save, or invest – take inventory. What are your goals? What’s on your “must” list, and what’s just “nice to have”?
A quick year-end checklist might include:
- Reviewing your retirement contributions (can you add a little more?)
- Confirming you’ve taken any Required Minimum Distributions (RMDs)
- Making tax-deductible charitable donations before December 31
- Considering a Roth conversion while 2025 tax brackets are still in effect
Planning may not be festive, but it’s freeing — it replaces uncertainty with clarity.
Don’t Forget the Stockings
It’s easy to focus on the big-ticket items — 401(k)s, IRAs, or major investments — and overlook the smaller “stocking stuffers” that add up over time.
Think of things like:
- 529 contributions for kids or grandkids
- Flexible Spending Accounts (FSAs) — use those funds before they expire
- Automatic savings transfers to build your emergency fund
Like stocking stuffers, these small actions might not look impressive alone, but together they can make a meaningful impact.
Remember, It’s About the Long Game
Every child learns patience waiting for Christmas morning — and that’s a perfect metaphor for investing.
The market has its ups and downs, but successful investors focus on the big picture. When emotions rise (and we know they do), remind yourself: volatility is normal, and time is your greatest ally.
Just like the holidays, the reward comes from consistency, not instant gratification.
Give with Intention
Generosity is one of the best parts of the season — and it can also be part of a thoughtful financial plan.
If you’re planning charitable gifts, consider:
- Donating appreciated securities instead of cash — you’ll avoid capital gains tax.
- Qualified Charitable Distributions (QCDs) if you’re taking RMDs.
- Gifting strategies to reduce estate tax exposure or teach the next generation about giving.
Give with your heart — but also with your head. Strategic generosity can benefit both you and the people or causes you care about.
Reflect, Reset, and Rebalance
As you pack away decorations and set new goals, take time to rebalance — not just your portfolio, but your priorities. It’s the time to consider the questions, like:
- Are your investments still aligned with your risk tolerance and timeline?
- Have your life goals changed this year — new job, grandchild, or home purchase?
- Do your spending and saving habits reflect the life you truly want to build?
A quick year-end review can help you start January with a fresh sense of direction — and a little less financial clutter.
Final Thought: Be Generous with Grace
The holidays remind us that money is simply a tool — one that should serve your values, not define them. Whether you’re giving gifts, paying bills, or planning retirement, it’s all part of the same goal: building a life that feels rich in every sense of the word.
From all of us at Fluent Financial — Merry Christmas, and cheers to a smart, prosperous New Year.