What Dickens and Scrooge Teach Us About Money

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Charles Dickens classic A Christmas Carol has always been a seasonal favorite among local theaters as a tale of hard times.

As the pandemic continues and the cost of living skyrockets, it remains popular for Christmas 2021. Productions are appearing across the country, from London’s Old Vic to Cornwall’s Minack Theater.

A Christmas Carol brings audiences spooky ghosts, comedic moments, dramatic drama and the unforgettable figure of Scrooge, the wealthy skinflint who only sees his mistakes a moment before it’s too late.

History is also a memorable lesson in money, its uses and abuses – a lesson that rings as true today as it did in Dickensian days.

This year’s inflation worries are likely to feed our inner Scrooge a little more than in the past few years, with the ghost of the future of Christmas looking dearer by the day.

So now is a good time to focus on the old miser’s belated realization that his accumulated money is useless to him and the world around him. The ghost of his late partner Marley convinces Scrooge that wealth has no value beyond the grave. For the first time in his life, he expresses regret for his lack of generosity.

Dickens’ message is that accumulating wealth for one’s own good is not what money is for. Don’t save too much for life, he tells us. Distinguish between accumulating enough and spending your money – enjoying it or helping our favorite people in our lifetime.

Corn A Christmas CaroI have other, more subtle lessons for our savings and investments. History shows that we have ingrained patterns of behavior when it comes to money. It’s not just Scrooge who finds it hard to change, having locked himself in his own world. Bob Cratchit, his long-suffering clerk, stays with his master out of misplaced loyalty, though he is grossly underpaid. So while Cratchit and his impoverished family arouse sympathy, he is hardly a role model.

Rather, we should take note of Scrooge’s mentor as moneylender, the merry Mr. Fezziwig. He ran a profitable business, while acting generously to his employees, as even Scrooge admits: “The happiness he gives is just as great as if it cost a fortune.

In the modern world, it’s not just about being kind and philanthropic. Fezziwig is certainly a good example of managing a business or a portfolio according to principles. Early ESG if you will.

The theme of strong money running through A Christmas Carol and other Dickensian novels were inspired by the author’s precarious financial situation. He sometimes struggled with his own debts and those of his father. A Christmas CaroI saved Dickens from a financial crisis – as the excellent family film of 2017 eloquently shows The man who invented Christmas.

Unsurprisingly, other Dickensian novels are a treasure trove of quotes about money. Mr. Micawber, who speaks memorable about money in David Copperfield, operates on the highly suspect principle of “something will happen”.

This was not a rule to rely on in the Victorian era, when creditors could throw a debtor in jail (as they did with Dickens’ father). Neither today, despite our social security system, if you want financial security.

Mr. Micawber’s Recipe for Happiness is perhaps the most widely cited money quote in Dickens’ work: “Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, the result of happiness.” Annual income twenty pounds, annual expenditure twenty pounds zero and six, result in misery.

But this recipe is incomplete: everything revolves around the here and now. This will not guarantee a comfortable retirement: there are no savings and no inflation protection. And to be truly financially secure, you also need an emergency fund of around six months’ salary.

Mr. Micawber is not the only financial expert in David Copperfield. There’s the stagecoach driver Mr. Barkis, who is less articulate than Mr. Micawber but no less lively. “It was also true. . . like turnips. It was also true. . . like taxes are. And nothing is more true than them.

Dickens would surely have been aware that these lines echo Benjamin Franklin’s famous grim observation: “Nothing is certain except death and taxes.”

This is not entirely true: Taxes were not frozen in the 19th century, as Dickens well knew since, alongside his literary achievements, he was a prominent tax reformer.

This is not true today either. We benefit from the tax-advantaged envelopes of individual savings accounts (Isas) and self-invested personal pensions (Sipps), as well as annual allowances on capital gains. Use them to their fullest, I say, and do it now, because you never know when the rules might change.

But don’t spend too much time worrying about HM Revenue & Customs this Christmas. You might risk following Scrooge with his obsessions. Put aside your statements and your calculator and seek inspiration from Scrooge’s nephew, Fred, a man of unfailing cheerfulness who never abandons his uncle, inviting him to Christmas, despite the man’s repeated refusals. older.

It was Fred who said: “And so, my uncle, although he never put a piece of gold or silver in my pocket, I believe that Christmas has done me good and will do me good. Good ; and I say, God bless him!

Moira O’Neill is Head of Personal Finance at Interactive Investor

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