How do I look after my finances?
Key Learnings
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Financial planning is important for everyone but especially for professional athletes as their playing career tends to be relatively short and unstable due to the risk of injuries.
Professional athletes are likely to enjoy peak earning and make 50-75% of their lifetime earnings before age 35.
Financial planning can be complicated. It is important to turn to a professional for financial advice; choosing the right people to advise you could be the difference between growing your wealth and losing everything.
Creating a budget and monitoring it at regular intervals will help you remain financially stable.
Stay out of financial trouble by being careful about your spending and ensuring you are aware of the risks of gambling and illegal sports betting.

How to stay out of financial trouble

To build wealth and reach financial independence, you simply need to spend less than you earn. It is an easy concept to understand, but sometimes it might be difficult to execute. Here are some hints to protect yourself and avoid financial problems.

 

  • Hint 1: Use credit responsibly

    Easy access to credit is one of the biggest reasons for overspending and you can get in deep trouble if you are not careful and start charging things you don’t have the cash to pay for. It feels like free money, but it is not: credit is borrowed money that you will have to pay back with interest. If you misuse credit you may find yourself with monthly bills that you cannot pay.

    In general, it is only worth making purchases on credit if it is something that will be beneficial for the long-term (mortgages, education payments, etc.). Beware of minimum payments, they often give a false sense of achievement and your money continues to collect interest.

 

  • Hint 2: Get the right insurances

    In order to protect yourself from unexpected financial problems it is best to insure yourself against the unexpected. As an athlete you should insure yourself, your career and your investments. Imagine yourself in the very worst-case-scenarios and insure yourself against any of these scenarios happening. The better prepared you are for the unexpected, the less likely it will damage your financial stability and future.

    Note: Insurance coverage can be very different from one country to another, so seek professional advice from your own advisor or bank to guide you through choosing the appropriate types of coverage.

 

  • Hint 3: Plan for the future
    An athlete’s career is usually substantially shorter than the average person’s career. As a result, it is very important to properly prepare for your retirement as an athlete. To do this, you can consider the following:
     
    • Start saving from your first pay check
      Remember that your career is quite short and it could be dangerous to spend all your money while playing professionally.
       
    • Invest in education
      Having a stable financial future after your playing career is over can only be done if you have taken the time to educate yourself properly (for more information about your options, see: Education).
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    • Figure out how much money you will need for the future
      ​​​​​​​To assess your personal situation, it is best to seek advice from a professional. Be aware that retirement plans can be very different from one country to another.