The holidays can be an exciting and joyous occasion or stressful depending on how you prepare for them. But, using the Griswold’s situation in National Lampoon’s Christmas Vacation as a learning experience, you can take some steps to make the holidays more bright. So, grab some eggnog and your moose mug, and consider the following as you prepare for the year ahead:

  • Don’t write a check you can’t cash – Or, as the saying goes, “don’t count your chickens before they hatch.” By relying on a source of income that you haven’t yet received, you put yourself at risk of financial catastrophe. For example, if you decide to put in a pool, make sure to wait until you receive your bonus check.
  • Make sure you have an emergency reserve – Should the unexpected occur (for example, getting fired after your crazy cousin kidnaps your boss), it is important to have a liquid source of funds available to meet your monthly expenses until you can recover. This account is normally recommended to cover approximately 3 – 6 months’ worth of expenses.
  • Save some of your year-end bonus – While bonuses can be a nice surprise and should be enjoyed, we recommend saving at least a small portion. This could mean padding your emergency reserve, depositing money into a brokerage account, or contributing to an IRA.
  • Consider pet insurance – Should your feline companion chew on a cord and get electrocuted, chances are the vet bill will be fairly high. Much like human health insurance, pet insurance allows you to set deductibles and coinsurance based on an agreed-upon monthly premium. While not cheap, in circumstances where your pet requires more expensive care, this coverage can help greatly reduce the cost of your vet bill and save you money in the long run.
  • Give to charity (or family) – It truly is better to give than to receive. Whether it’s helping those less fortunate or purchasing gifts for family members who don’t have the funds, the joy of helping others is priceless. In addition, should you decide to give to charity, you may receive the added benefit of a potential tax deduction.
  • Make decisions together – Prior to making any major purchase, be sure to speak with your spouse first to avoid potential conflict. This could include asking their opinion on installing a pool or purchasing gifts for other people’s children. Financial disagreements account for a great deal of marital strife, so clear communication is imperative.

In the new year…

  • Have your insurance coverage reviewed – This includes disability insurance should a loved one take a tumble off the roof while hanging lights and homeowner’s insurance in case your home is destroyed by the neighbors’ zealous anticis. In addition, don’t forget about your auto coverage should you wreck while narrowly avoiding a run-away-sled, liability insurance if someone gets hurt (yourself or others), and health insurance if holiday planning causes high blood pressure and puts you at increased risk of a heart attack.
  • Keep your estate plan up-to-date – Should one of your family members make the unfortunate decision to light a match in the vicinity of flammable material and the worst were to occur, it is extremely important to have current legal documents. These can help ease the estate distribution process and reduce family conflict in an already stressful time.