It’s A Wonderful Life begins on Christmas Eve in a small town in upstate New York called Bedford Falls. Up in heaven, angels discuss the plight of George Bailey, a pillar of the town community who is contemplating suicide. They decide to assign a second-tier angel, Clarence, to George, in order to help him not lose hope. To begin, they show Clarence moments from George's life to prepare him. We see George at 12 save his brother Harry when he falls into a river in the winter. In the course of the rescue, George loses hearing in his left ear.
Next, George works for Mr. Gower at a drugstore. When he's asked to deliver a prescription for a kid in town, he sees that Mr. Gower has accidentally put poison in the pills. George prevents the delivery and saves another life. Years later, we see a fully grown George Bailey, a man determined to explore the world. The day before he is set to leave for his journey overseas, George's father dies and Potter, the richest man in town, wants to dissolve Bailey Building and Loan, the family company. Potter is prevented from dissolving Bailey Building and Loan on one condition: that George stay on and run the company. George's dream of traveling and going to college is dashed, but he agrees to save his father’s business. He gives his college money to his brother, Harry, who goes on to become a second-team All-American football player.
George is excited for Harry’s return because Harry is meant to take over the Building and Loan, but Harry arrives to Bedford Falls having already secured a job in a nearby town. Again, George must put his dreams aside for his brother’s wellbeing. At the same time, Mary, a young girl who is in love with George, has returned from college. George goes to see her and they fall in love and marry. On their way to their honeymoon, there is a bank run and they must sacrifice all of their wedding money to the people of the town in order to keep the Building and Loan open. Since they never get to go on a honeymoon, Mary makes up an old abandoned home for their honeymoon suite. She even purchases the house for them to renovate and inhabit.
Years pass and we see George and Mary helping families of little means purchase homes, while their friends are becoming wealthy and living in New York. George has taken over a large portion of land which has allowed many low-income families to enjoy quality homes and get out from under the thumb of the profit-mongering Potter. In a strategic move, Potter offers George a handsome salary to come work as his assistant, but George rejects his offer, determined to work for the greater good instead.
When World War II breaks out, Harry goes off and fights nobly, earning a Congressional Medal of Honor. Back in Bedford Falls, the bank examiner has come to review the Building and Loan accounts, but that same day, Uncle Billy accidentally put an $8,000 deposit into a newspaper that Potter is reading. Potter realizes it and keeps the money, while Billy scrambles to find it with George. In desperation, George goes to Potter for a loan, but Potter calls in a warrant for his arrest. At home, George becomes inconsolably angry about his imminent professional demise. He gets drunk, wrecks his car, and goes to a bridge where he contemplates committing suicide. Just in time, Clarence—his guardian angel—falls into the icy river and George jumps in to rescue him.
When they are safe on shore, Clarence tells George he is assigned to him to help him, and if he does so he will get his wings. George doesn’t believe him and the two go back into town for a drink. However, Clarence has made George's wish—never to have been born—a reality. No one in town recognizes George, and all of his good deeds—saving his brother, saving Mr. Gower, protecting the town from Potter, marrying Mary—did not even happen. Terrified, George runs back to the bridge to pray for his life back.
George is sent back to his real life, which fills him with a new sense of purpose and joy. He sprints through the town wishing everyone Merry Christmas and when he gets home Mary has gotten the whole town to rally around him to get him the $8,000 that the business needs to survive. All the sacrifices that George has made for others in his life culminates in those same people sacrificing in order to help him.
