There are so many pitfalls athletes can avoid after they finish playing college ball, when they wrap up playing professionally, or basically anytime they’re gearing up to make a major life transition. A few of my biggest ‘Aha’ money moments came before right before I was featured in this magazine.
Long story short- every person starts somewhere. It’s never too late to learn about money, create a plan, or start over if you’re not in the best financial position. Here are a few money management tips former athletes can use to avoid potential financial pitfalls.
Money Management Tips for Ex-Athletes
Have a goal. Even if you’re just starting out, its important that every athlete has a goal for the future.
- When your playing days come to an end, what kind of work will you do?
- What type of salary do you expect to make?
- What challenges, if any, do you have when it comes to money and how can you fix them?
- What types of sacrifices are you willing to make to ensure you’ll be comfortable financially in your 30’s, 40’s, 50sw and beyond?
When I landed my first full time job, I was so upset and embarrassed that I couldn’t afford a couch, a nightstand, or other items to furnish my apartment. Instead of giving up and blowing money fast, I created short term and long term financial goals for myself. I then started making small sacrifices and investments in myself to help me reach those goals.
Be hands on with your money. ‘Set it and forget it’ is not something you want to do when it comes to monitoring your finances. Even if you have a financial advisor or an accountant, don’t assume your money is being saved, accruing interest, or being spent the way you intend. Instead, be active in monitoring all aspects of your financial portfolio.
When I decided to rip the band aid off and create a budget, I was shocked to see how my daily spending habits were preventing me from saving most of my paycheck. Schedule weekly or monthly check-ins to track your money and make sure its moving the way you want it to.
Invest. Having your money sit in a traditional savings account isn’t going to help you build wealth. If you don’t have a lot of funds to invest, or don’t feel like purchasing securities like stocks, bonds, etc., consider putting your money into a high yield savings account to increase interest.
Investing in the stock market gave me and Kurt the cash needed to purchase and flip our first home in NYC. Without those funds, we wouldn’t have had the down payment needed purchase the home we have today.
Avoid credit card debt. High-interest credit card debt, especially now, can cause a huge burden on your finances and on your mental health. Use credit cards wisely by paying off the balance asap. Any money you’re not putting towards debt can be put into savings.
Save for emergencies. Unexpected expenses happen, so having extra cash on hand to take care of those items is clutch. Car repairs, medical bills, home repairs, etc. are all things that pop up unexpectedly, and having the cash to pay for them can help athletes not take a hit and grow their wealth at the same time.
A few months ago, Kurt and I got hit with a few unexpected expenses: a higher than expected tax bill, a ceiling repair, and a broken dryer. Having the cash to cover those items helped us stay on track financially and prevented us from taking a financial hit.
Live below your means. It’s so easy to qualify for a luxury apartment, to lease a nice new car car, or purchase seasonal clothes. Instead, live below your means and stack your cash. Find roommates, live with family, take public transportation, and buy wardrobe staples that will last you for years. The short term sacrifices you make can put you in a much better spot years later.
When I first started working, I opted to rent studio apartments with modest amenities. I purchased a used car that I paid off within 4 years. Having low rent and no car payment for over a decade allowed me to put extra cash into my savings account.
Track your spending. Holding yourself yourself accountable means tracking your spending at all times. Doing this will help you identify and prevent wasteful spending habits. Doing this consistently can help enhance your finances, your well being and your self confidence.