For two weeks, all eyes will be on the 2020 Tokyo Olympics taking place July 23 through August 8. Over 11,000 athletes are slated to compete, even as the city faces a State of Emergency due to COVID-19. As we watch our favorite summer sports over the coming days, it's easy to see why we see athletes almost as superheroes. These men and women undergo years of rigorous training, develop astounding mental strength and achieve nearly perfect physical peak performance.
As we enjoy the games, let's remember that there are some lessons we can all learn from these athletes - even lessons we can apply to our financial fitness. The mindset with which you approach your finances actually isn't so different from an Olympian'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 young track star may have a goal for their next meet while simultaneously working towards 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 college fund for your children. 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 paycheck 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 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.
Even if you’re working with a financial advisor, you don’t have the equivalent of a coach that can bench you for failing to have discipline. An advisor can draw those lines for you, but you ultimately need to carry the will not to cross them.
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 harbor the discipline to make them a reality.
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. To learn more about how we can help you reach your goals, contact our office. David DeMore, CFP®, MSFS, EA is a tax and wealth advisor serving clients in the Greater Milwaukee area.
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.