How Athletes Can Protect Their Finances in a Recession

With economic uncertainties that always seem to be looming, it’s so important that you take the time to strengthen your finances and other skills to help you weather any financial downturn. While I can’t relate to every athlete’s personal situation, I have overcome a few recessions in my career. I graduated during the 2008 recession, a time when millions of people lost their homes and the U.S. unemployment rate climbed to 10%. That meant I was competing for jobs with people who had so much more experience than I had. Recently, Kurt and I had to get through the COVID crisis, which started around February 2020 and brought over two years of job losses, financial instability, and food insecurity for millions of people world-wide. Both times, we found ways to push through and keep our financial security.

1. Assess Your Financial Game Plan. Start by reviewing your current financial situation. Take a hard look at your income, expenses, and investments. Identify areas where you can cut costs and create a realistic budget that aligns with your post-athletic career goals.

I highly encourage making this a routine every few months, or annually. Don’t wait until things get bad financially. Make a habit to review your finances and update your budget as you find new jobs, get promotions, and build your wealth.

2. Diversify Your Income Streams. Just as you diversified your skills on the field, diversify your income off the field. Explore opportunities for additional revenue streams such as investments, part-time gigs, or leveraging your expertise for speaking engagements or coaching.

Again, don’t wait until you’re struggling financially to build different revenue streams. This is one thing I wish I did much sooner. Even if you’re new at your job, you have years of experience as an athlete. You can create a business that offers summer camps or winter-camps, you can offer personal training services, or utilize a skill or passion you didn’t have time to explore as a full-time athlete.

3. Build a Financial Safety Net. In uncertain times, having a financial safety net is crucial. Popular advice is to have an emergency fund that covers at least three to six months of living expenses. But this can be really hard when you got bills to pay!

If you don’t have any savings, I suggest starting with a goal of one month of living expenses. Having enough money to pay for one month’s worth of rent/mortgage, groceries, utilities, and other necessities can give you a solid safety net if you no longer have work or have to take a pay cut. Then, gradually work your way up to two, and then three months of living expenses. Savings of any size can act as a buffer in case of unexpected financial setbacks.

4. Level Up Your Financial IQ. This is the time to understand the basics of investing, savings, and debt management. Consider seeking advice from financial professionals to make informed decisions about your money. At the very least, take a few minutes each week to learn new financial terms.

And this doesn’t have to be hard! This link shares 20+ terms to know, but you can break it down to 4-5 basics each month. Making the time to educate yourself with just the basics can be one of your best strategies in navigating economic downturns.

5. Network Like a Pro. Your network is your net worth. Cultivate relationships within and outside your industry. Networking can open up new opportunities, provide support during tough times, and keep you in the loop about potential career moves or investments.

6. Embrace Frugality. Kurt will tell you- I’m always on a budget. During a recession, every dollar saved is a dollar earned. Embrace a frugal lifestyle by making mindful spending choices. Differentiate between needs and wants, and prioritize long-term financial health over short-term gratification. Over time, I embraced living more frugally when I saw how much it helped me save.

7. Continue Skill Development. Just as you honed your athletic skills, continue to sharpen your professional skills. Stay relevant in your field or explore new areas of interest. Lifelong learning not only enhances your marketability but also equips you to adapt to changing economic landscapes. Over the years, I’ve brushed up on my Excel skills, learned how to edit videos, and taught myself the basics in website creation.

8. Protect Your Health. A recession can be stressful, impacting both mental and physical well-being. Prioritize self-care, maintain a healthy lifestyle, and consider investing in health insurance to mitigate potential medical costs.

As a former athlete, you’ve faced challenges on the court, and in life it’s very likely you’ll face financial hurdles. By assessing your financial game plan, diversifying income, building a safety net, investing in knowledge, networking strategically, embracing frugality, and prioritizing health, you’ll be better prepared to thrive in the face of a recession.

Having a plan of action and committing to understanding my financial situation made a huge difference in how I got through each recession as a young adult. Throughout my journey, I’ve had so many questions and  made mistakes, but took the time to learn from them to improve my financial situation. Even though I had great financial role models through my parents and family friends, I didn’t learn many financial basics in school. It was important that I embraced the learning curve and not fight it, which helped me so much in the long term. Remember, resilience is your strongest asset—play smart, stay strong, and win the game of financial stability!

---