I’ve decided to keep up the festive theme this week. My post on what your favourite Netflix shows can teach you about managing your money proved popular, so I decided to apply the same to your favourite Christmas songs.

The news is still fairly bleak and Christmas can be a difficult time for many people for all sorts of reasons. This year may be even harder, with many unable to see family and loved ones due to the pandemic.

Therefore, I think some light relief is much needed – the serious financial news can wait until the new year!

People often talk about the true meaning of Christmas. Most Christmas songs and films have this message running through them, even if it’s not immediately obvious. Now, I’m aware this is not a financial message, but it doesn’t mean there aren’t personal finance lessons to be learnt too.

The songs I will cover in this post are:

• Last Christmas
• Santa Baby
• Do they know it’s Christmas
• All I want for Christmas
• Fairytale of New York

Last Christmas

How can a song about heartbreak offer any personal finance lessons? I’d forgive you for asking this.

While having your finances in order can’t protect you from heartbreak, it can protect you from financial ruin as a result of a relationship ending.

Sudden life changes are hard emotionally, but also financially. You may need to find a new place to live, buy a new car or simply run a household on one income rather than too.

Having an emergency fund of around 3-6 months expenses can help protect you during this time and get you back on your feet. This gives you one less thing to worry about, while you’re dealing with the emotional aspect of the ended relationship.

It’s also worth thinking very carefully when making key financial decisions. Is the person you’re signing a mortgage with or leaving your assets to in your Will, likely to give your heart away ‘the very next day’?

Hopefully if you’ve got to this stage, you won’t think they will. But, it’s always worth thinking twice about these things and making sure you have the same financial goals in mind. As mentioned previously, this won’t prevent heartbreak, but may prevent bankruptcy.

Santa Baby

I’ve already written a whole post dedicated to this song and it certainly couldn’t be ignored. The level of extravagance displayed is either impressive or terrifying, depending on which way you look at it.

I’m not sure there’s actually many positive personal finance lessons to be learnt in this song. But, perhaps it offers an insight into a few things we should look to avoid.

For example, think about what you really need. Simply putting everything that comes into your head into your basket (online or real), will likely lead to you spending more than you want.

Instead, make a list of everything you need before you start shopping. It can also be helpful to make a note of things you want and then look again in a couple of weeks and see if you still want it. Half the time, you’ll have forgotten about the item all together!

Do they know it’s Christmas

It’s easy to get caught up in the extravagance of Christmas and what we can and cannot afford. This Band Aid chart topper reminds us of the less fortunate.

The personal finance and FIRE communities are understandably focused on wealth creation and preservation. But, I was shocked to see a discussion recently about whether it’s ok to give to charity while pursuing financial independence.

I’m not suggesting you should give every spare penny you have to charity. But, for many, philanthropy or charitable giving can easily form part of your budget and will make a real difference to those who need it most.

If you’re not keen on giving money, you can always volunteer your time or take part in a challenge, like the Foodbank Advent challenge I did last month.

All I want for Christmas

No list of your favourite Christmas songs could be complete without the Mariah Carey classic.

The opening line – And I, don’t want a lot for Christmas… – is a frugal person’s dream. Acknowledging that most of us have too much ‘stuff’ and can live without spending too much money on things we don’t need is an important thing to do, particularly if you’re looking to cut your expenses.

Essentially, the song is about forsaking other pleasures or gifts for one ultimate goal or thing, in this case a lover.

This could be described as delayed gratification – one of the key principals of investing. When investing, you can get instant gratification by selling as soon as the market goes up or day trading to see instant gains. But, it’s important to keep a long term perspective. Remember why you started investing and hold tight even when it’s difficult to. In 10 years’ time you’ll thank yourself.

Fairytale of New York

This is perhaps a more controversial choice as one of your favourite Christmas songs, as it’s lyrics are in need of updating (homophobic slurs aren’t good). But, listening to an amended version, you will hear, in its essence, a song about dreams. Pretty apt for Christmas, most would say.

It starts with a reference to gambling – Got on a lucky one / Came in 18 to 1 – which is of course a financial decision. I don’t speak about gambling because of it’s dangers and unpredictable nature. If it is something you’re concerned about, I would recommend checking out this site.

The song continues to speak of the allure of the big city, of ‘making it’ and being successful. The song speaks of youthful hope and ambition, but sadly leads to bitterness and resentment.

While not strictly a personal finance lesson, this can teach you about personal development.

Firstly, you’re never too old to achieve your dreams. There are plenty of stories of people in their 50s and 60s gaining PhDs, landing dream jobs or writing books. Don’t be too hard on yourself if you haven’t quite got it all together by 25 – something I’m still trying to teach myself!

A second lesson is about attitude. While I don’t fully subscribe to manifestation and the law of attraction, I do believe attitude is important. If you always see the negatives and believe the world is against you, less good things will happen. It can be difficult, but keeping an open mind and always jumping at opportunities, will often lead to much better things.

Those are the top money lessons from your favourite Christmas songs

If you found this post interesting, please like it and share across social media or send it to your friends. I’d also love to hear your thoughts and suggestions. What’s your favourite Christmas song? Do you think your favourite Christmas songs contain a personal finance message too?

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