4 Money Lessons We Can Learn From Ebenezer Scrooge

Should you embrace your inner Scrooge this Christmas?

The name Ebenezer Scrooge has become a symbol for stingy and miserly behavior ever since the publication of Charles Dickens' A Christmas Carol. You don't need to read the book or see the film to know that this man, this "squeezing, squeezing, wrenching, grasping, scraping, clutching, covetous, old sinner," rejects all forms of kindness in his efforts to save money.

One of the chief themes in Scrooge's story is the importance of love and generosity and the abandonment of his mean-spirited ways. As we all grapple with higher living costs and the seasonal pressure to spend money every time we log on to the internet or leave the house, there are lessons we can learn from Scrooge -- both before and after his ghostly visitations.

1. He doesn't try to keep up with the Joneses

Bah! Scrooge didn't care what anybody thought of him. He spurns human sympathy, cares only about money, and lives in a tiny room that once belonged to his now-dead business partner. Now, I'm not suggesting you attack any Christmas carolers who dare to raise their voices in song on your doorstep. Nor am I advocating threatening to stake revelers with their own sprigs of holly.

However, the pressure to buy the latest phones, own big screen TVs, drive shiny new cars, and wear fashionable togs can cripple all of us financially, no matter how much we earn. If you study the habits of millionaires, many of them don't splash out on expensive watches and flashy cars. Instead, they invest in assets that will build wealth over time, such as real estate or stock market investments.

2. He lives within his means

Scrooge was bitterer than the coldest wind as he went about his loveless life. The notorious penny pincher skimps on everything, whether it's rent, heating, or food. He dines on watery oatmeal, makes his coal supply last, and lives alone in a tiny forgotten room. It is a miserable existence, but he certainly lives within his means.

Spending less than we earn is one of the surest ways to build financial stability and avoid debt. If your outgoings regularly exceed your paycheck, it might be time to consider some ways to cut costs or increase your income. There are ways to be more frugal without growling at beggars and forcing employees to fight off the cold with only the heat of a candle.

You might turn the heat down slightly this winter to cut electricity costs, cut back on a couple of subscription services, or use coupons or cash back apps to save on groceries. If you feel like you've already scraped your budget to the bone, perhaps you could take on some extra hours at work or even consider a side hustle. What matters is ensuring you aren't spending more than you bring in.

3. You don't always need to spend money to be happy

No vision presented by the spirits to Scrooge is more moving than that of the Cratchit family. Poorly dressed but for their brightly colored ribbons, the household rejoices in a meager meal of potatoes and a small goose. They may have to stretch the meal with applesauce, and sage and onion stuffing, but nothing could dampen their joy and celebration.

Money could certainly have bought the Cratchits more food and comfort. It would also make a difference to many Americans who aren't sure how they'll pay next month's rent or keep food on the table over Christmas. But once people's basic needs are met, some studies show that money doesn't necessarily make you happier.

True, Scrooge didn't spend any money and he was miserable. All the same, the idea that you have to spend money to have fun can be extremely damaging to your bank balance. There are many free and low-cost ways to have fun and to show our loved ones we appreciate them. A lot comes down to spending intentionally on the things we value and not necessarily splurging on things we don't need.

4. You can be charitable and build wealth

Building wealth does not have to mean refusing to give to charity. In fact, many millionaires donate significant amounts of money to charitable organizations for a whole host of reasons. Jacob Marley, the ghost of Scrooge's business partner, tells Scrooge that his life's business should not be to make money. Instead, he wished his life had been dedicated to charity and improving the lot of his fellow man.

Almost 200 years later, the themes in Dickens' masterpiece are still as relevant as ever. The massive jumps in living costs have made it even harder for many families to keep their heads above water financially. Around 1 in 5 adults went hungry this summer due to food insecurity, according to the Urban Institute. Food banks and charities reported that demand for their services has far exceeded their expectations. A number of Americans didn't have enough money in the bank to pay for Thanksgiving meals this year.

Bottom line

Dickens' caricatures may seem extreme, but Scrooge's character could have been based on a number of real people both then and now. Back then, one was called John Elwes, a wealthy politician who purportedly ate moldy food and squatted in his own properties when tenants had moved out.

As with most things in life, the trick is to find a middle ground. You don't have to eat moldy potatoes to, say, cut back on food waste this holiday season. And for many families, there are ways to celebrate without overspending and taking on debt that could make 2023 more financially challenging.

I, for one, will be embracing a bit of Scrooge's frugality as I turn down the heating and put on an extra sweater. But I'm putting some of the money I've saved on heating and canceled subscriptions towards gifts for my family and donations to my favorite charities. To misquote Tiny Tim, Merry Christmas, one and all.