Money Smart Athlete Blog

Athletes and Mindful Spending Habits

By Stefanos Gregoriou, The Sports Financial Literacy Academy

Athletes often make headlines for striking massive deals, seemingly living in a world of boundless wealth. However, these same headlines can later reveal stories of financial turmoil, even bankruptcy. This reality underscores the importance of mindful spending habits.

Financial mindfulness means making deliberate choices about spending and saving; it means being fully aware of our current financial situation and doing what we have to do in the present to help our financial wellbeing in the future. Mindful spending habits involve thoughtful decision-making, planning for the future, and making financial choices that align with long-term goals. By adopting such habits, athletes can protect their earnings and build lasting wealth, ensuring they do not fall into the same traps that have ensnared many of their peers.

Take, for instance, the former NFL player Vince Young. Despite signing a contract worth $25 million with the Tennessee Titans in 2006, Young filed for bankruptcy in 2014. Reports indicated that spending on homes, cars, and gifts for friends and family, led to his financial downfall.

Contrast that with NBA icon LeBron James, known for his strategic approach to finances. James prioritized financial education early in his career, assembling a team of advisors and investing wisely. His prudent habits have solidified his status as one of the wealthiest athletes in history.

Beyond the high-profile examples, countless athletes have transitioned from sports to retirement successfully by embracing mindful spending habits. NBA veteran Andre Iguodala is renowned for his frugal lifestyle, opting for modest purchases and wise investments over extravagant indulgences. Iguodala’s disciplined approach has positioned him for financial security long after his playing days are over.

One of the fundamental pillars of financial mindfulness is tracking spending. Athletes must monitor where their money goes, identifying areas where they can make adjustments to avoid unnecessary expenditure. Setting clear financial goals is equally important, providing athletes with a roadmap for their financial journey and helping them stay focused and motivated.

Creating and following a budget is essential for effective money management. By allocating money according to priorities and differentiating between needs and wants, athletes can ensure that essential expenses are covered first while avoiding overspending on non-essential items.

Automating savings is another practical step athletes can take to build a habit of saving, ensuring that a portion of their income is consistently set aside for future needs. In addition to saving, investing a portion of earnings is crucial for building wealth over time. Athletes can put their money to work in investment vehicles such as stocks, bonds, or real estate, potentially earning returns that outpace inflation and grow their wealth over the long term. Seeking advice from a financial advisor comes highly recommended, as their expertise can provide valuable insights and personalized guidance tailored to the athlete’s financial goals and circumstances.

Additionally, regularly reviewing and reflecting on their finances, allows athletes to assess their financial health, make necessary adjustments, and stay on track with their goals. By incorporating these practices into their financial routines, athletes can build a solid foundation for lasting wealth and prosperity. Mindful financial management is not just about how much they earn but how wisely they spend, save, and invest, which ultimately determines their financial success.

The Money Smart Athlete® Blog is established and run by the Sports Financial Literacy Academy® (SFLA). Through its education programs, the SFLA has the vision to financially educate and empower athletes of all ages to become better people, not just better athletes.  For more information on our courses, our SFLA Approved Trainer Program®, and how they can benefit you and your clients, please get in touch with us at [email protected].