Athletes are often treated like superheroes. For good reason, too - they undergo rigorous training, develop astounding mental strength, and achieve what we call mental and physical peak performance. Studies even show that student-athletes are more likely to have better academic and behavioural performance.1
Today, though, we aren’t talking about physical fitness. We’re talking about financial fitness — the mindset with which you approach your finances actually isn’t so different from an athlete’s approach to their sport.
Defining Your Goals
All athletes develop tailored goals to put them on the path to success. Financial goals are the same; if you don’t lay the groundwork for your financial future by establishing goals and priorities, the financial future you want won’t be guaranteed.
Short-Term vs. Long-Term Goals
Athletes often have both short-term and long-term goals; a track star may have a goal for their next meet while simultaneously working towards the Olympic trials far into the future.
When it comes to your finances, you want to think long-term. Those goals could manifest through a retirement savings account, or perhaps an eventual education fund for your children or grandchildren. What do you want your financial reality to look like in the long run? What can you do now to make it happen?
Yet of course, establishing short-term goals is also crucial to your finances and intermingles with these long-term goals. For example, you might say “I am only going to spend ‘x’ percent of my pay cheque this month,” or “I am going to set aside ‘x’ amount of money every month to save for a vacation next year.” By consciously thinking about your short- and long-term goals and how you can attain them, you’re already one step closer to financial fitness.
Athletes are notorious for the hard work they put in. Staying in peak physical condition and aiming for constant improvement requires immense discipline, as does staying in peak financial condition.
Athletes, especially those at the top of their game, depend on their coaches. A strong relationship with a coach can help keep you focused and prevent the wheels from falling off if you slip a little bit. A financial advisor has the same role in your financial life. Ultimately it's up to you to stay disciplined, just like the athlete, but having someone in your corner to offer encouragement and direction can be meaningfully beneficial towards achieving your goals.
This is especially true when it comes to your spending habits; when you have a budget, stick to it without exceptions. Once you make an exception, it becomes easier and easier to keep doing so. Your goals are nothing if you don’t harbour the discipline to make them a reality.
Reviewing your plans and your results is also critical. Professional athletes will record their efforts and review them on a regular basis to try to improve their outcomes. You can do the same. Book regular financial discussions with your spouse, regular review meetings with your financial planner, and don't be afraid to reward your own good behaviour.
Stick With it
The best athletes don’t give up, even when they fail: they stay committed and focused on their goals. Your finances can be unexpected. Even though having a financial plan is vital, things happen that we can’t possibly account for.
Don’t be discouraged if you do happen to go over budget or your investments aren’t doing well. Just like an athlete: pick yourself back up, refocus, and keep putting in the work to reach your financial goals.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.