By: Laura Walton AFC®
Talk is cheap and, honestly, not nearly as motivating as hearing how someone makes good financial decisions in real life. Too many professional athletes end their careers broke despite huge salaries and bonuses. Here’s a different story…
Steven Kutz’s article, “Why NFL player Ryan Broyles lives like he made $60,000 last year, and not $600,000,” is a good read – don’t skip the link! Here’s what stood out to me:
- “I want to invest and I want the investments to provide so I’m financially free.” This is my favorite line in the article. Free…financially free! The biggest payoff of managing finances is achieving financial freedom. Financial freedom gives you choice…choice of where you want to live, how you want to live, what kind of work you want to do (or not do), etc. Far too many of us let our finances manage us rather than managing our finances.
- Broyles makes conscious decisions that support his goals. He saved $2500 by driving his own U-Haul across country instead of hiring a moving company. “There were times when we were in the U-Haul with our dog, and I thought, ‘this is not the best situation.’ But we made it work.” Living within your budget is almost never the easiest choice – it’s easier to hire someone to do a job, to skip shopping for a better price and to buy what you want rather than just what you need. But, what do you give up? You give up financial freedom.
- Broyles doesn’t have cable. This is a spending category that’s gone from zero in the days of rabbit ears to an average of $100+ a month in 2015. He reminds us that cable is a choice, not a necessity, and that there are cheaper alternatives. And, oftentimes, it’s the $100 here and there that make the difference in whether you can save and invest.
- Broyles isn’t counting on luck. He realized that an injury could end his career. Rather than hoping it wouldn’t, he was proactive and managed his income to sustain him should that happen. Too often we blame bad luck when we should blame ourselves for lack of planning.
- Ryan and his wife are on the same page. He said, “Sometimes I think, ‘let’s just pay full price for something,’ but my wife talks me into finding a deal.” Often one partner is a spender while another is a saver. The best you can hope for is that the spender can see that the long-range plan for saving and investing is more important and offers a bigger payoff (financial freedom) than today’s spending. Ryan and his wife support and enforce each other – the ideal situation.
- “I’ve always worked for my money, and seen it as something I needed to cherish and not take for granted.” That dollars don’t come easily and, once earned, must be made the best of is a key lesson that’s best learned starting young.
- Broyles uses the 50-30-20 budget formula! Elizabeth Warren presented this concept in her book “All Your Worth: The Ultimate Lifetime Money Plan,” which was co-authored by her daughter, Amelia Warren Tyagi. I use this concept in the budgeting work I do with clients. It provides benchmarks for fixed and discretionary expenses and makes sure you plan for financial goals as well.
There’s more but you get the idea. Financial freedom is the goal and it’s a choice. You often have to give up something today to gain that freedom. It’s a matter of deciding which is more important to you. What are your financial goals for 2016?