Credit card debt, no savings, low salary, no retirement funds… there are many athletes (and non-athletes) who deal with financial stresses. Sometimes our situations are so bad, it might feel impossible to fix things or to start over. Knowing where to start can make a huge difference in helping you get out of a financial hole.
But where should you start? I’ve read articles that say you should build up your emergency savings first, pay off debt, prioritize retirement, etc. In my humble opinion, what you focus on first depends on what your financial priorities are and what is bothering you most. Below are a few strategies athletes can take when managing financial stress.
Where to Start When Feeling Financially Overwhelmed
Take a breath. Financial stress is smothering. Before you decide what to focus on, take a moment and focus on the changes you are about to make. When I decided to fix my financial issues, I took a moment to breathe and let go of the stress I had from debt, and the feelings of failure I felt from not being where I wanted to be financially.
If you’re committed to making sacrifices and making change, take a moment to give yourself some grace, a feeling you can reference as you get closer to your goal.
Identify all that’s stressing you. Next, identify what’s causing your stress. For me, there were multiple things: high levels of credit card debt, making a low salary, and not being able to contribute to my retirement account like I wanted to. I also didn’t have 3-6 months of emergency savings, so I added that to my list.
Rank each stressors. Next, prioritized what items you wanted to focus on. My breakdown looked something like this:
- Pay off all credit cards
- Build my emergency savings
- Find a higher paying job
- Contribute to my 401k
I didn’t focus on item #1 only. I put most of my resources into paying off my credit card debt and building my emergency fund. I also worked to find a job with a better salary, and took steps to increase my contributions into my retirement account.
Pay essential bills. Even if you want to start investing or grow your savings account asap (yes, I was that person) it’s important to paying essential items like your rent, mortgage, transportation expenses, health insurance and others. Meeting your essential needs without incurring additional fees will help you stay afloat and allow you to tackle your financial concerns.
Start controlling discretionary spending. Most people can cut out extras. Those unnecessary expenses might include ordering take out, paying for subscription services, monthly fitness fees, etc. By controlling what you can, like your grocery bill and entertainment costs, you can redirect those saved funds into fixing your finances.
Save what you can. When you’re really struggling it can be very hard to save. But this doesn’t mean you can’t put a little aside each month. There were times when I could only put $25 or $50 aside each paycheck, but those small sums of money helped me lay the foundation for my emergency savings account. Over time, having a few hundred or thousand dollars in the bank will give you major piece of mind.
Talk to an expert. Sometimes you can’t go at it along and should enlist the help of a financial expert. Speaking with a financial advisor can help strategically improve your situation.