Finance Lessons Learned by Preparing Thanksgiving DinnerNovember 18, 2019
Hosting a Thanksgiving dinner is no small undertaking. It takes a great deal of planning, shopping, prepping, and cooking to make it all go off without a hitch.
Reflecting on what it takes to prepare Thanksgiving dinner can teach us some valuable financial lessons. Just like Thanksgiving dinner, achieving your financial goals requires a plan, a budget to match, and a way to proceed when everything goes awry.
Lesson #1: It pays to budget
It’s easy to get carried away with shopping for Thanksgiving dinner. Everyone has their favorite side and pie, and a 30-pound turkey is no drop in the bucket. Without clear spending guidelines, Thanksgiving can quickly get expensive.
That’s why we need a budget. Before the big day, get a grip on your costs by taking the following steps:
- Start with a guest headcount.
- List the basics of the meal — consider these your “needs.” Maybe that’s a turkey, mashed potatoes, gravy, stuffing, cranberry sauce, and a pie.
- List the additional items — these are your “wants,” or luxury items. That could be a specialty pie (dark chocolate bourbon pecan pie, anyone?) or extra sides.
- Estimate the cost, asking “how does this compare to my usual spending on food?” If the need arises, do you feel comfortable spending less on items in other parts of your budget?
If you find that your estimate exceeds your food budget, it’s time to get creative. Start by paring down any “luxury” items. Next, try going potluck style, asking your guests to bring a side, beverages, or dessert to share.
By budgeting and setting money aside, we’re less likely to worry about whether Thanksgiving spending is cutting into other parts of our budget, like upcoming holidays gifts.
Just like Thanksgiving, retirement is an expensive goal. It takes time to create a robust budget that matches your desired outcome. To effectively budget for retirement, you’ll want to estimate:
- The number of years until your retirement
- Your annual retirement expenses, including those “wants” and “needs”
- The number of years you’ll need to use your retirement savings
Of course, a plan is the first step — executing on that plan is what yields a successful retirement plan. For young people, retirement may sound far off, but it’s never too early to begin saving and investing. Regularly saving toward this goal will help you enjoy the satisfaction of a well-planned retirement.
Lesson #2: It’s all about the plan…
In making a budget for Thanksgiving, you may have realized “I need a plan to make sure this goes smoothly.” Menus and recipes help us plan what ingredients we need to buy and how many hours we’ll need before dinner is ready to hit the table.
Here again, we see how Thanksgiving preparation principles apply to making financial plans, especially when it comes to your retirement. We can ask ourselves crucial questions that follow our budget estimates, like:
- What are some ways I can save for retirement? Do I have a tax-advantaged retirement account like an IRA, and have I been making the maximum contributions? Do I have a retirement account option through my employer, like a 401(k) or 403(b)?
- Given my timeline and risk tolerance, what types of investments should I consider to achieve my retirement goals?
- Am I currently on track to meet my retirement goals, or do I need to adjust my saving and investing methods?
If you don’t know the answers to these questions, that’s okay! Whether you choose to ask for the help of a financial professional or research on your own, the important thing is that you’re educating yourself and taking control of your financial future. If you give yourself enough time and adequate resources to prepare for retirement, you can set yourself up for success and avoid relying on the kindness of others.
Lesson #3: …but sometimes you have to wing it
Sometimes you’ve done everything — you budgeted for the meal, you calculated the cooking time for each dish down to the minute. But things happen! The dinner rolls burn, the turkey falls on the floor just as we’re sliding it out of the oven.
This can happen in any part of life, including our best-laid financial plans. Even if you do your best to plan, something can happen that throws you off course. Take a moment to yell at those burnt dinner rolls, then regroup and adjust to your unforeseen circumstances. You can and will recover.
We’ve got your back.
Just like that hot turkey flying out of the oven, life can come at you fast. When that happens, we’re here to help you get back on track with your finances.