Football was my life in the 90s. I was a fan of the New York Jets, Seattle Seahawks and Buffalo Bills. The highlight of my career was the AFC touchback guide in 1995.
If you don’t know what that means, let me explain it differently: I played the most popular sport in the country, and for a while I did it very well. But then it was over, because the average career in the NFL was just over three years. I broke this limit, but I could not buy time. Time has an unbeaten record.
For my second career, I chose a profession in which I already had some experience – personal finance. Throughout the 1990s, I’ve seen young people sign contracts worth millions of dollars – and for many, those millions evaporated shortly after their careers ended.
My years in the NFL taught me how to avoid debt, in much the same way that my subsequent career as president of Debt.com did. So let’s start 10 lessons on debt that you can learn from footballers.
1. Brains beat bucks
Money will get you out of debt, but it won’t get you out of debt. I’ve seen this up close for many years. Give someone $ 1 million and don’t teach them how to budget, save, and invest – and I promise you they’ll spend their last dollar before retirement.
Don’t believe me? A study by the National Bureau of Economic Research shows that nearly 16 percent of retired soccer players go bankrupt within 12 years of ending their career on the grid. Meanwhile, according to CNBC, “the typical salary of a football player is $ 2.7 million.”
So if you think your monetary problems can be solved with a cash injection, I don’t believe it. If millionaires can go broke without financial knowledge, then you can prosper. with this is knowledge. Where do you get this education? Personal finance websites. They are free and don’t take much time at all.
2. Budgeting is your game plan
For the past four years, Debt.com has conducted surveys of Americans about budgeting. Typically, about 6 in 10 adults maintain a monthly household income and expense budget. During the pandemic, that figure jumped to nearly 80 percent. But it should be 100 percent.
You can’t save money on a new car, a new home, or a new family if you don’t know how much your life is now worth. I promise those NFL players who went bankrupt didn’t have a budget. NFL star Warren Sapp has made $ 40 million in his 13-year career. He retired in 2008 and filed for bankruptcy in 2012.
We played in the NFL at the same time, and although I didn’t know him, I’m sure I can say this: Warren Sapp was not on budget.
3. Shrink the field with technology
Those without a budget often tell me they don’t have time. They must be very busy people because these days it only takes a few minutes a day to budget. You don’t use pencil and paper. You are using a phone or computer.
There are safe online tools that do boring math for you. Mint is free and YNAB (You Need A Budget) costs $ 84 per year but offers more personalization. Many banks and credit unions now provide budgeting tools that make it easy to predict, for example, how much you will save per month if you drink one less Starbucks latte per day or buy fewer meals during the work week.
Technology has exploded any excuse for not budgeting.
4. Get ready for life’s tricks.
When I tell people that they need an emergency fund that can pay their bills for at least three months, they laugh and say, “Every a week, there is an emergency in my life! »It may sound true, but five tragedies can really ruin your finances:
- Job loss
- Divorce
- Natural disaster
- Serious accident
- Health crisis
When any of this hits – and if you live long enough it is probably inevitable – your whole life can fall apart. Obviously, the psychological and physical stress of these situations is quite great. But add financial stress to that and your life can fall apart.
Numerous polls show that 4 out of 10 Americans cannot pay $ 1,000 for an emergency. Polls also show that Americans are worried about this.
The Emergency Fund is about more than just peace of mind. It can save you money because when disaster strikes and you’re not ready, you often use your high-interest credit cards – and hold up balances for months or even years before you can pay off your debt.
How to create an emergency fund? Slowly. Using your monthly budget, you can set aside as little as $ 5 per week at first. Then, after a few months of not missing out on those few dollars, you might add a few more.
5. Hire a new teammate.
If you really want to lead your emergency fund, ask your boss or your HR department if they can help you.
Nearly 95 percent of Americans get paid by direct deposit – no more paper checks – and many employers allow that deposit to be split between checking and savings accounts. Many will let you break it three ways. This way, you transfer a few dollars to your savings account every week. You won’t even remember doing this because you will never see it in your paycheck.
This works especially well when you are getting promoted. You can channel most or even all of it into your emergency fund, and before you know it, you have enough funds to never worry about bouncing back from bad news.
6. Automate your money
What if I told you, “I know how you can make almost $ 600 and you don’t have to do anything. In fact, you only need stop do something. “Interested?
All you have to do is stop being late on your debt. Late fees and overdraft fees cost Americans an average of $ 577 per year. This is frustrating because there is a simple and automatic solution: auto payment.
Nearly every bank and credit card – and even many utilities – offer automatic bill payment. You set the day you want the invoice to be paid, and this amount is automatically debited from your bank account immediately, not the day before. So you never have to pay late fees again. Best of all, once you set it up, you don’t have to do anything.
7. Check your credit reports.
Most people these days are realizing the importance of their credit rating. These three numbers, which range from 300 (poor) to 850 (excellent), determine how much interest you pay on your credit cards and if you get a mortgage at all, as well as each bridging loan.
Most people don’t know that your credit score is based on your credit score. reports… These are detailed records of everything that you borrowed and returned (or did not return). You can usually scan these reports for free once a year, although due to the pandemic, you can do it weekly until April 2022.
Checking these reports is free and Debt.com will show you how to check your credit report quickly and painlessly. Considering that one third of all credit reports in this country contain errors that can lead to higher interest rates, you should be very interested in checking them for errors.
8. Retirement plan
Every NFL player thinks about retirement. Even if you are new to an all-star game, you know that one injury separates you from life without football. So everyone needs to think about how to save up for retirement. Fortunately, the tactic is similar to creating a contingency fund. In fact, you can do both at the same time, effectively budgeting and using your HR department – this time to ask about 401 (k).
9. Get professional help
When I played in the NFL, we had nutritionists, strength coaches, and physical therapists to help us achieve peak performance. I learned to trust the experts in my field. Now I run a debt settlement company with credit counselors around me. These experts can help you get out of debt, and best of all, their detailed and personal debt analysis is provided free of charge.
You can call a nonprofit credit counseling agency to speak with one of these consultants, but like the NFL teams, some of these agencies are better than others. If you are looking to find winners, a site like Debt.com can introduce you.
10. Money is a means, not an end zone
So far, we have talked about money as a practical matter. In the end, we recognize that it has a psychological component. You’ve heard the terms “shopping therapy” and “keeping up with the Joneses.” It’s a cutback to spending money to make you feel better, and spending money to have other people respect you or even envy you.
For decades, there has been research into money as self-medication and self-praise. I just want to leave you with this thought: money is nothing more than football. It is simply an object that helps you perform better.
I have been playing football for almost ten years. I focused on improving distance and accuracy. I didn’t get hung up on the ball. I kicked the ball. The ball didn’t hit me.
Don’t let money rule your life. Manage your money.
This post was originally published on Wealth of Geeks.