Financial Lessons from Thanksgiving Dinner

Thanksgiving is my favorite holiday.  In addition to being focused on family and good food, I like that it isn’t as commercial as Christmas or other holidays.  This year, I will not be preparing a full Thanksgiving dinner, but instead will bring a couple of dishes to a potluck.  Curiously,  I  find that there are a number of financial lessons that can be learned from lessons of cooking Thanksgiving dinner.  Here are my top five:

–Plan ahead — forgetting to defrost the turkey is the usual one that a number of people forget (and how to fit everything into the oven).  Financial planning also requires forward thinking, especially retirement and long-term savings planning.

–Have a strategy in mind — because most people prepare dinner for large numbers, it helps to have a game plan in mind so that things that can be made ahead are; and so that dinner is served hot, rather than lukewarm and dried out.  For financial planning, a haphazard approach can also be risky, and I find that having a gameplan helps me to stay on track everyday.

--Remember to diversify — having a diversity of dishes is a good thing, especially if you have picky guests or those with food restrictions.  I try to make sure that enough dishes are vegetarian and to have two items for dessert so that people feel they have a choice.

–Don’t overdo it– I recall one Thanksgiving dinner I went to, the host had 12 pies (there were less than a dozen of us attending).  While it was great to be able to sample many different pies, the excess of leftovers (everyone took a lot home) was obvious.  In investing, one mistake that I made in my earlier years was to try and invest in almost everything, putting small slivers of investment into a wide number of different funds.  Not only did this not contribute to performance, but it left me unable to monitor all of the different funds.  I’ve since streamlined my investments into a more manageable handful.

–Remember to compensate if you overdo it — like almost everyone else, I tend to overindulge in eating Thanksgiving dinner.  I think it’s expected.  However, I try to compensate the next couple of days by eating less (or exercising more).  Similarly, in financial planning, if you’ve overspent your budget in the last few weeks, it’s important to think of compensating, restoring the emergency fund, and getting things back on track.  One weekend or one days worth of overindulgence is usually not too bad if things get back on track.

shared at Works for Me Wednesday and Frugal Friday