Personal Financial Planning & Money Management

Key topic

Personal financial planning is a lifelong process and student-athletes are guided through the specifics of it in this lesson.  Student-athletes will be making financial decisions all their life; sometimes they will foresee situations and plan deliberately, sometimes, well, things just happen, and they will be forced to make instant decisions.  Creating their financial game plan means making deliberate decisions now, that will allow them to get closer to their goals while reflecting the realities of being an athlete.

Learning objectives

• Personal financial planning helps you design your financial future. The earlier you start, the better off you are.
• The circumstances and characteristics of your life as an athlete, influence your financial concerns and plans.
• The financial planning process involves figuring out where you are right now, where you would like to be, and creating a plan to get you there.
• Your personal financial plan should adhere to your personal values and mission, and it should reflect the legacy you want to leave behind.
• Needs refer to necessities. Wants refer to things you would like to have – something not absolutely necessary for your survival but which can add comfort and pleasure to your life.
• A budget is a plan for how to handle your money and it serves as a roadmap to give you the money you need to live the lifestyle you want.
• Saving money is the cornerstone of a financially secure lifestyle. Saving allows you to build a foundation for establishing future wealth.

Introduction

The personal financial planning process is rather simple:  You figure out where you are now financially, you decide where you want to be financially in different phases of your life, and you devise a plan of how to get from where you are now to where you want to go.  The difficult part is to have the necessary discipline, consistency and flexibility to stick to your plan, re-evaluate it when necessary and respond to unanticipated needs and desires sensibly.

This information will help you create your financial game plan, your organized strategy for maintaining financial health and accomplishing financial goals.  Don’t forget that sooner or later, you will be living on your own, you will share your life with a significant other, perhaps start a family. At some point or another you will have to devise a plan of your own, that will allow you to be financially successful; just like the game plan that your coach hands out, explaining how you will win the game, a financial plan takes into account several financial moves, which if you successfully follow and complete, it’s highly likely that you will be financially successful.

It’s recommended that you start thinking about financial planning as soon as possible, of course having in mind that you have to be in control of your finances and be earning some money, in order to execute your plan. Consider this an early sneak preview (just like in the movies), where you will learn how to plan your financials and you will experiment with financial planning through your available financial resources.

Financial resources are the combination of income and earnings you will have in life; these resources can be salaries, return from investments, sale/rental of assets and in general any sources of revenue that come your way. Even though not always a good choice, a financial resource can also be money from a loan.

With the possibility of signing your first professional contract being so near, we want to help you create your financial game plan, your written strategy for attaining financial wellbeing and accomplishing financial goals.  Developing your financial game plan will not only allow you to control your financial situation; it will enhance your quality of life and it can reduce any uncertainty you may feel about money-related issues and future needs.

Your dreams, goals and values give a direction to your financial plan

Your dreams, goals, and values provide direction for your financial plan, which should incorporate them in a meaningful way. Financial planning will help you to manage your finances in a way that you can achieve your dreams and goals while not overlooking your values.

You will need money to turn some of your dreams into reality. These “financial dreams” form the basis and ultimate goals of your financial plan. The ability to structure your dreams into something that inspires and motivates you is the secret of turning these dreams into something tangible.  Writing down your dreams on a regular basis will increase the chances of them becoming reality. Deciding to pursue one of your dreams, transforms it into a goal and finding the steps needed to accomplish the goal makes it part of your financial planning. Some goals may be set for the near future or short term. They can be accomplished in a few weeks, months, or a year.  Other goals may require long-term planning, disciplined saving, and sometimes guidance from financial professionals or digital financial tools.

Every person holds different values, such as family, success in career, health, love, comfort, friendship, different types of skills, helping the needy, education, etc. All these values affect the decisions you make during your life, the way you spend your free time and the way you handle money.

You need to remember that your personal financial planning should be in accordance to your values. You really need to “be true to yourself”, your plan has to fit you, not the dreams of your family, your boyfriend/girlfriend, or your friends.  If you’re doing this for anyone else but you, you will probably not make it and you will quit halfway. Therefore, you have to base your financial plan on the dreams you have, and what you really want deep down in your heart and soul. Your passion for your goals will help you stay focused and motivated to achieve them, and every small goal you achieve will help you move forward.

Defining your mission

Your financial plan should be steered by your mission in life and it should take into account the legacy you want to leave in this world.  You need to decide on your mission before you start the financial planning process.

A personal mission statement will help you identify your core values and beliefs.  Applying these core values and beliefs in your everyday life leads to the creation of your personal legacy, what people will know you and remember you for. By defining your personal mission, you will focus your energy on your personal priorities and goals and you will have more chances of achieving these goals.  Your personal mission statement basically describes how you want to live your life.  To define your personal mission, you need to do self- reflection; you need to focus on your values and give your own definition of a successful life.

Your personal mission statement should consist of a set of guiding principles that capture how you want to live your life.  To come up with these guiding principles you need to answer the following questions:

• What kind of person do you aspire to be?”
• Which values shape your decisions?”
• Whose lives do you want to impact?”
• What does a successful and fulfilling life look like to you?”

The answers to the above questions will help you create your own personal mission statement, which will give you direction in the decisions you make on a daily basis. Your mission statement is not set in stone. It should evolve as you grow, ensuring it always reflects your true values and aspirations. Your mission statement will evolve as your career and priorities change over time. It’s ok to start somewhere and as you grow and mature, your needs will change, your opinions and the way you approach life will change and so will this mission statement.

Action Steps – Exercise 1 (10 Minutes):

Ask the students to think about what their mission is and ask a few students to share it with the rest of the class.  Continue with a discussion.

Creating your legacy

Your legacy will be the way people remember you and the way you impact people around you, such as family, friends, the community and so on; a way to be recognized by others. By designing and creating your legacy, you will not only impact others positively, but you will also enrich your life in the sense that you will not let life just happen; you will be the architect of your own life and design it the way you want.  To design your life purposefully, you need to identify the intangibles that make your life rich and you need to give voice to the things that give meaning and purpose to your life.  A real legacy is built on what you are giving to the world; it focuses on how you make the world a better place.

Being at a young age, you have a lifetime ahead of you to offer the best of you to your loved ones, to your community and to the world.  You are most probably wondering how you should do that.  There are a few questions that you can ask yourself; the answers will give you guidance on how to make a difference and leave your mark in the world.

Questions to ask yourself include, but are not limited to:

• Who do you want to impact, and in what way?
• What lasting contribution can you make for future generations?
• What steps will turn this vision into reality?

Once you’ve answered these questions, you can start mapping your legacy with a long-term vision for future generations.

Creating your personal legacy is not a one-time deal; it is a work-in-progress.  As you continue improving yourself, your awareness of your life purpose will increase; that will help you fine tune your legacy-building steps and integrate them into your daily life and your financial plan as well.

Prioritize your spending: Differentiating between wants and needs

You must understand that “needs” and “wants” are two very different things that very sparingly coexist. Needs are essentials for survival and well-being, such as housing, transportation, food, and healthcare. You need a pair of shoes to practice your sport; you need to have a bed to sleep at night; you need to go to school every day and so on.

Wants are non-essential luxuries, such as a beachfront house, designer clothes, or a luxury car.

The tricky part is identifying correctly what is actually a need, because quite often we tend to disguise wants as needs. Actually, differentiating between needs and wants is not as easy as it might first appear, due to the fact that a whole marketing science has been devised to shape the two by influencing our mind set and consumer behavior. Inability to differentiate between the two, causes many people to spend recklessly, rendering them unable to save, or invest.

There is a simple rule you should follow: “Spend money on the things that you need before you spend money on the things that you want.” Spending your money following this rule does not, at all, mean that you should only buy the things that you need.  Life is meant to be lived, not survived. Treat yourself to some wants, but do so when you can actually afford them.  Good money management is all about covering your needs first and spending on wants after and only when you have extra money to do so. For example, spend your allowance on lunch at school and your bus fare to travel to and from school. When you have enough money spared, without sacrificing any of your needs, then you can purchase the new gadget you wanted or that expensive pair of branded jeans.

As a working adult but as a student athlete too, you will be faced with the conflicting choice of preparing for life ahead and the impulse to live and enjoy the present. You need to find a balance between the two, often having to make compromises for the sake of your future. Start by understanding your spending habits and patterns, how much money you are spending on your needs and how much on your wants; something which will allow you to both save more money for the future and be able to spend money on things you want now.  Track your weekly expenses to spot overspending and adjust your budget accordingly. If you find that tracking your spending is too constraining, then you can create an account with money that will be used purely for spontaneous spending. Knowing there is money solely for that purpose can help you protect the money you have in your other accounts.  Setting clear short-term and long-term goals makes it easier for you to be happy with your spending choices. If for example you have plans to start your own business within the next three to four years, then your choice not to buy an expensive sports car, won’t seem so difficult.

It is highly acceptable to be “hungry” for progress, development, achievements and assets in your life. It is actually suggested that you maintain this level of being “hungry” throughout your life and in your sports career as well. Reflect on your journey, appreciate your progress, and stay grateful for your achievements. Once you master the ability to be thankful and appreciate where you are in life, you will find that it becomes much easier to identify your needs and distinguish them from what you want; it will help you mature in the process and it will also facilitate your financial plan altogether.

Action Steps – Exercise 2 (10 minutes):

Ask the students to think of a situation where they had to choose between spending on a need or a want.  Pick out a few students and ask them to describe the situation and what they ended up and continue with a discussion. 

Living within your means

The best money management habit to adopt is to always live within your means.  By adopting this habit, you are a step ahead in your financial game plan. The amount available for spending and saving is called disposable income.  It represents any income you have earned less taxes and other withholdings.  Your disposable income is what you have available to cover your needs, to spend on wants and to save.

Living below your means actually means that what you spend and save during a given timeframe, a month for example, does not exceed your disposable income.  It is advisable to first spend money on your needs, save a good part of what is left, and use the remainder to fulfil wants.  It is quite important to strike a good balance between spending money on wants vs needs and to save enough for future investing or for large purchases you may plan to do in the future.

Living above your means is when you spend more than your disposable income; usually that happens when you use credit and you get into debt.  Consistently living above your means builds up debt which can prove to be disastrous to your financial game plan.  This is one of the worse money management habits to have and it should be avoided!

Living exactly within your means is when you spend all your disposable income on needs and some wants but you do not save any money at all.  Basically, this translates into ‘living for today’ with no financial planning for the future.  Even though no debt is created in this case, it kind of leads you to a dead-end situation with possible undesirable effects in case, let’s say, you become ill and cannot work to earn a regular income.

Learning to live within your means and knowing how to manage money, are some of the most important life skills you will ever master. Adopting smart spending and saving habits, along with wise investments, will guide you toward financial stability and long-term success. Using financial tools like budgeting apps and automated savings can make managing your money easier and more effective.

Earning money

Earnings are the money you make from a job or other income sources, such as investments, interest, freelancing, or digital platforms. Today, income can come from traditional employment, side hustles, content creation, or even royalties from intellectual property. Any financial profit or gain you make goes into the earnings category, since you earn that money.

Earning’ money requires effort—whether physical, intellectual, or creative. It could come from labor, skill, or innovation, such as professional athletes using their talents.

Once you work hard for your money, you become more mindful of how you spend it. Financial planning, prioritizing needs, and setting goals become natural steps in managing your hard-earned money.

You should be aware that there are two different types of earnings.  There is a distinction between active earnings and passive earnings.

Earnings fall into two categories:

• Active income: Money earned from working—whether in a job, running a business, or freelancing. This requires time and effort.
• Passive income: Money earned with little ongoing effort, by having your assets work for you and receive dividends, rental income, royalties, etc.

Early in life, you usually rely on your parents for financial support, making it easy to overlook spending habits. However, preparing for financial independence early—by learning budgeting, saving, and earning skills—will help you transition smoothly into managing your own finances.

One key to financial success is not just saving, but increasing your income. While cutting expenses is important, finding ways to earn more—through skill-building, side hustles, investments, or entrepreneurship—can accelerate financial growth and create more opportunities.

Once you start earning your own money it becomes imperative that you allocate this money wisely and with a plan. The allocation and control of your earnings, over a period of time is what we call a budget.

Saving and growing your money

Savings refer to the money that you decide to put away for future use, instead of spending. It is a form of an opportunity cost, since you forgo the opportunity to spend it now and instead store it for the future. On top of the numerous benefits of saving up for future purchases, delaying purchases in favor of saving helps you realize whether you need something or if it’s just an impulse purchase and a waste of money which you will later regret.

A common mistake of people, especially when their income is of a good standing, is failing to understand the need to implement a saving strategy; this strategy is imperative to your financial security, but also vital for financial growth, which will allow you to enjoy a lifestyle upgrade, later down the road in your life, or take corrective action in the case of possible financial setbacks or errors of the past. Setting aside money each month builds a foundation for establishing future benefits and even wealth.

If your weekly allowance is for example $100 and your spending needs are only $80, it means that each week you can save up to $20. In a month that is $80. The piggy-bank example is perhaps the wisest example for people of all ages to follow. If you start saving at the beginning of the school year, you will have saved at least $280 (20 @ 14 weeks) by Christmas time. Remember, you will continue to service your needs throughout each week, but at the same time you will reach a point when you have this extra cash in hand, come Christmas time. You could use half to buy yourself a great pair of playing shoes, without asking for it from your parents, or you could buy your parents a small present to show your love and appreciation. You don’t have to spend all your savings at once. Remember to save, even from your savings. You could even plan to attend a summer sports camp, using your own money and not having to worry about your parents’ response. Wouldn’t that be great?!! In real life, it works the same way, more or less.

You can follow some simple steps to develop your saving strategy, which must of course adhere to the goals of your greater financial game plan.

For short-term savings, your number one priority is safety and any interest you might earn on them is just a bonus. Checking accounts, savings accounts, money market deposit accounts at banks and certificates of deposit are covered by the FDIC. Traditional savings accounts offer security, but high-yield savings accounts and online banking options provide better returns. Additionally, micro-investing apps and digital savings challenges can help build a strong habit of saving. You should start saving money based on what you want to do with it.

We suggest you divide and allocate your savings into three basic categories: emergency, personal savings and long-term savings. You will reach a stage in your life where you will hopefully earn enough money to be able to save and have different saving schemes.

One key to successful saving is to trick your brain into saving more. Using techniques like rounding up purchases, using separate savings accounts for different goals, or automating transfers to your savings account, can make saving easier and more effective.

Your emergency savings must be your priority and must reach the point where they equal to approximately a year’s worth of your living expenses. Having emergency savings can reduce your worry in case any unexpected problems arise, especially with your employment status and the case of uneven cashflow situations.

Your personal savings are important for the overall quality of your life. As you grow up, if you choose to have a family and kids, you will become responsible to provide to them the same, if not more, that your parents are providing for you right now. It can be about a vacation that you had hoped for in a long time, or an international tournament that you want to go to and you have the chance to combine vacation with accompanying the team to another country. It can be used for a medical emergency, or a purchase that adds true value to your life.

Your long-term savings should grow over time through investments like ETFs (Exchange-Traded Funds), index funds, and retirement accounts. These offer long-term growth with lower risks compared to individual stocks.  Deposit money into this account every month.  You should make it a priority to deposit money in this account first, before you pay your bills or buy anything else. Your long-term savings is the money that will give you financial security to plan your future, whether this is paying for college tuition, or creating your own business, or paying for your new car, or having an extra cushion just in case.  Having smart goals in mind makes the choice to save—rather than spending—much easier.

It is to be expected that a family of working-class people will not be able to service all three types of savings at the same time. Start with the emergency fund, which is important for obvious reasons and work your way from there. Utilize any extra money for your savings and start building your long-term savings once your emergency savings fund is at the point we discussed above. If in the future you find yourself in a situation that your sports career, or your business career, are in such a good standing that you can afford to do all at the same time, then you should take the opportunity and do it, as you should not take anything for granted.

Saving while earning is one of the most crucial financial goals you should set and perhaps is not a bad idea to discuss with your parents the possibility of starting from now. If you feel that practice makes perfect, why not join your parents and participate in the family savings plan now, using the money you receive from your monthly allowance, or part-time work.

Saving can indeed be challenging, but it gets easier over time. Don’t forget that savings is the key to calling your own shots and also the key to a better quality of life. By setting up and following your budget, you’ll see your savings grow over time. Start your savings plan now and reap the benefits every day of your life in the future.

If you are wondering how your savings and money will grow, the answer is rather simple and it’s called interest and compound interest.

Interest is calculated as a percentage of a balance (sum of money), which is paid periodically for the privilege of using this money. The amount is usually quoted as an annual rate, but interest can be calculated for periods that are longer or shorter than one year. You should remember that interest applies if you have money and lend it, for example if you deposit your money in the bank that is a form of lending your money to the bank for use; if you borrow money from the bank, it means that you have to repay the bank the amount that you borrowed, plus extra money that is the interest the bank sets for its own profit.

When you decide to start a savings fund (sooner than later) you will deposit the funds in a savings account, which effectively translates to you letting the bank use your money (lend it out or invest the funds). In exchange, you’ll expect to earn interest. If you are not going to earn anything, you might be tempted to spend the money instead, because there’s little benefit to waiting. But with interest, you benefit from saving your money. This interest usually depends on the bank rate, the amount you save and the time period you choose to keep your money saved. A higher rate or a longer-term saving, results in making more money.

Compound interest basically means “interest on the interest” and is the reason behind many investors’ success. Compound interest, also known as compounding interest, is interest calculated on the initial principal, but which also includes all of the accumulated interest of previous periods of a deposit/ loan. Compound interest will make an amount grow at a faster rate than regular interest, which is calculated entirely on the (initial) principal amount.

By taking advantage of compound interest, you can end up with significantly more than your original savings and be on your way to achieving your lifetime financial goals.

We will take a look at an example which demonstrates the power of compound interest.  Let’s say you save $1,000 per year for 10 years and you receive an interest of 5% per year.

 

 

 

 

 

 

 

Year	Amount at start of year	Amount saved	Total amount subject to interest	Interest earned at 5%	Total amount at end of year
	US$	US$	US$	US$	US$
1		1,000	1,000.00	50,00	1,050,00
2	1.050.00	1,000	2,050.00	102.50	2,152.50
3	2,152.50	1,000	3,152.50	157.62	3,310.12
4	3,310.12	1,000	4,310.12	215.50	4,525.62
5	4,525.62	1,000	5,525.62	276.28	5,801.90
6	5,801.90	1,000	6,801.90	340.09	7,141.99
7	7,141.99	1,000	8,141.99	407.09	8,549.08
8	8,549.08	1,000	9,549.08	477.45	10,026.53
9	10,026.53	1,000	11,026.53	551.33	11,577.86
10	11,577.86	1,000	12,577.86	628.89	13,206.75
Total Amounts		10,000		3,206.75

 

As you can see from the above example, at the end of 10 years your total deposit of $10,000 has a compounded interest yield of $3,206.75.  Not bad right?

Action Steps – Exercise 3 (10 minutes):

• What would happen if you saved $10,000 per year for 10 years at 5% per year?
• What would happen if you saved $1,000 per year for 5 years at 10% per year?
• Do you understand the power of compounding interest and how can you start using it?

Creating a simple budget

Irrespective of your financial situation and capabilities, you should always have a budget in place. Budgeting is an important tool because it helps you understand the bigger picture and it helps you control your financial situation at any given point in your life because it makes you take a long- term approach in life. A budget is a summary of your expected income and expenses for a period of time, usually a month or a year. While the word budget may have been falsely connected with restricted spending, you should remember that actually a budget translates into efficient spending.

You should remember that creating a budget is one of the best solutions to creating long term financial sustainability and success, as well as being prepared for any financial situation in your life and having control of your financials. The most important thing to remember for now is that a budget is essential in your life and that you should be equally disciplined, as in your sports and academics, in the process of following your budget and adhering to it. If you think you need help with creating your budget you can start working on it with your parents, so that you better understand the concept. As your income grows, consider using budgeting apps like Mint, YNAB (You Need a Budget), or PocketGuard to track expenses automatically. If you become a professional athlete or high earner, a financial advisor can help you manage larger sums and keep you accountable to your budget.

To prepare your monthly budget you can follow the simple steps listed below:

• Gather any financial documents you have available like bank statements, phone bills, credit card bills and any other information regarding your sources of income or expenses.
• List all your income sources and total them for the month. In your case, this may include an allowance, monetary gifts, part-time work, or side hustles like freelancing, tutoring, or selling items online. Apps like Fiverr, Upwork, and Etsy allow young people to earn extra income easily
• if you are helping someone with a business, or doing any part-time work. Your expenses include essentials (food, transport, school materials) and discretionary spending (entertainment, clothing, subscriptions like Netflix or Spotify). Tracking expenses digitally with apps like PocketGuard or bank categorization features can make this easier.
• Repeat the same process for all your expenses, but make sure you separate them into fixed and variable expenses. Fixed expenses will be relatively the same each month (i.e. monthly cable cost) while variable expenses are the ones that change according to your needs and wants (going to the movies, buying a new pair of shoes). Remember that variable expenses are the ones which you will be able to adjust, meaning that it will be the money you will have to cut-down from, when you need to balance your budget, if you are in a tight spot.
• Calculate the total of your monthly income and monthly expenses and if you have more income than expenses, you are off to a good start. You can use this excess for savings or buying something you really want (but don’t need). If your expenses are more than your income, you will need to start making some cuts on your expenses, or find ways to make more money.
• Try to adjust your spending, so that your income is always greater or at least equal to your expenses. This means all of your income is accounted for and budgeted for a specific expense, savings goal or investment.
• Review your budget on a regular basis in order to stay on track. At the end of the first month take some time to compare the actual expenses you made against the ones you wrote down in the budget as anticipated expenses. This way you can see where you did well and where you need improvement.

Action Steps – Exercise 4 (20 minutes):

Let’s prepare our Budget!  Based on the instructions/guidelines provided above try and construct your budget.  After you are done, we can have three people present their budgets and discuss how these budgets reflect their short-term, medium-term and long-term financial goals.

The financial planning process

Just like any other decision-making process, financial planning includes the following steps which we will go through by using yourselves as an example:

1) Determine where you are now financially

In this first step of the financial planning process, you will determine your current financial situation with regard to income, savings, living expenses, and debt; basically, all the sources of making money and spending money (financial obligations). Preparing a list with all items where you can make or spend money, will give you a foundation for financial planning activities.

Let’s say you have a monthly allowance of US$800 and the only financial obligation you have is to use money from your allowance to pay for your personal expenses while in college, since your accommodation and on-campus meals are already paid for.  Your monthly expenses include paying for your cell phone bill, ordering take-away food, going out for drinks or dinner, going to the movies a couple of times per month, buying your favorite Starbucks shake every morning and saving for an iPhone.  You want to buy the new iPhone within the next four months which costs US$800 and for which your parents will only pay US$400 towards it, so you are saving to come up with the other half of the cost.  You also have to cover the cost of personal expenses such as your personal toiletries, perfume and any clothes or shoes you may want to buy while on campus.  Let’s list your current monthly revenues and expenses in what we call a Monthly Allowance and Spending Plan:

Monthly Allowance and Spending Plan	US$ Expenses	US$ Income
Monthly allowance		800
Monthly expenses:
Cell phone bill (average usage is $80 per month)	80
Ordering takeaway/eating out 8 times per month @$20 each	160
Starbucks shake (30 days per month @ $4 per day)	120
Movies (2 times a month @ $20)	40
Going out for drinks (4 times per month @$30 each time)	120
Buying personal toiletries, clothes, shoes, etc	180
Saving towards buying the new iPhone ($100 per month)	100
Monthly Totals	800	800

 

2) Decide where you want to be financially over a period of time (developing financial goals)

Specific financial goals are vital to financial planning. Your financial goals can be short term, medium term or long term. They can range not only in terms of duration, but also in terms of size and magnitude. It’s ok to have financial goals that may seem to be either too easy to reach or very unrealistic, as long as you are working towards them. It is your decision to set these goals and it’s your responsibility to judge them, keep them or change them. To be successful, you should periodically analyze your financial values and goals. This involves identifying how you feel about money and why you feel that way. You should also evaluate if these goals are being met, if they are within your reach, or if they must be changed. The purpose of this analysis, among other things, is to differentiate your needs from your wants.

One of your short-term goals is to get that iphone four months from now, so you are saving about $100 per month for it.  Also, you want to take a trip with friends in a year from now which costs $1,200 and your parents have told you that they will not pay for that.

A long-term goal you have is to be able to buy a nice car (actually the car of your dreams) in about 4 years’ time after you graduate from college.  You know that your parents can only afford to pay about $2,500 towards the car and the particular car that you have in mind will cost about $6,300.  Therefore, you need to figure out a way to save first the $400 you need for the iphone within the next 4 months, the $1,200 for the trip within the next 12 months and the $3,800 for the car within the next 4 years.

Action Steps – Exercise 5 (10 minutes):

Ask the students “Can you figure out ways to come up with the money you need for the above financial goals?”  Continue with a discussion of the students’ answers.

3) Identify the way to achieve your financial goals, how to get there

Developing alternatives is crucial for making good decisions. Although many factors will influence the available alternatives, possible courses of action usually fall under the categories of continuing the same course of action, expanding the current situation, changing the current situation, or taking a new course of action. Considering all of the possible alternatives will help you make more effective decisions.

In connection with your above goals you realize that you will be able to save the money for the iphone within the next 4 months since it is well within your budget.  However, if you want to go to that trip in twelve months, you will have to save another $100 per month for that as well.  In addition to that, you have the car savings to deal with, which even though long term (4 years from now), you need to have a plan in place because the amount is quite large and you need a longer time horizon to come up with it.  So, what are your alternatives?  Perhaps you could increase your income by saving the money that you receive as Christmas and birthday gifts.  You usually get about $400 for Christmas from your grandparents and family and another $300 for your birthday.  However, even if you save that money, it will not be enough for everything.  Perhaps you could start working a few hours in the college cafeteria for some extra money, and earn $ 15 per hour.  Of course, instead of doing that or perhaps in addition to that, you could cut down on some of your expenses which are not absolutely necessary like your daily Starbucks shake or the movies or drinks, take-away food, and going out to dinner.  You could also save some money by only buying the necessary personal toiletries and limit buying new clothes or shoes since you do not really need any right now; your parents could buy them for you when you go home for the holidays. 

Action Steps – Exercise 6 (10 minutes):

Ask the students “What do you think of the above alternatives, are they feasible?  Would you rather increase your savings or cut down on your costs and why?”  Continue with a discussion of the students’ answers.

4) Consider the different ways of getting there, that is, achieving your financial goals

You need to evaluate possible courses of action, taking into consideration your life situation, personal values, and current economic conditions. You should remember that each alternative has its own consequence, its own possible cost and its own possible risk. You will undoubtedly need to sacrifice some things to gain others. In many financial decisions, identifying and evaluating risk is difficult.

You are simply overwhelmed with all of the alternatives you have identified in order to achieve all of your financial goals.  You really want to count on the Christmas and birthday money but you are not really sure that you would get the whole $700 this year.  It could be less for any reason.  Also, you are not sure if you have any hours to spare to work in the school cafeteria.  Your schedule is pretty packed already with both studying and practice.  Everything spins in your head and you are rather confused when evaluating your alternatives.  It seems that for every alternative, you have to give up something, so you need to prioritize according to your needs and your values.

5) Create your financial game plan

In this step of the financial planning process, you develop an action plan. This requires choosing ways to achieve your goals. Remember that in order to implement your plan, you have to consider your needs and your values.

You have given everything a lot of thought and you have finally decided what to do.  You will concentrate on your short and medium-term goals first and then deal with your long-term goal.  Your short-term goals are:

• Purchasing the iphone in 4 months and you are already budgeting $100 per month for this
• Saving the $1,200 within the next 12 months to go to the trip with your friends which means that you need to save another $100 per month for the next 12 months.

How will you do that, given that your current monthly budget does not allow you to spare any money after the money you put away for the iphone.  You have decided that for the next 4 months you need to change things a bit since you have to save another $100 per month for the next year’s trip while saving for the iphone as well.  After the next four months, things will be easier because you will not have the $100 per month for the iphone purchase and you can use that money towards the trip savings.  You have decided that you will not count on the Christmas and birthday money because of the risks of not actually getting the money or not getting the amount you estimate you need.  Therefore, you will be cutting back on expenses:  You will be going to the movies only once a month so there is a $20 monthly saving there.  In addition, you have decided that you will be buying your Starbucks shake every other day for the next 4 months so there is another $60 monthly saving there.  You are short approximately $20 per month so you have decided that you will cut down on your monthly spending on clothes by $20. 

Your monthly budget for the next four months will look like this:

 

Monthly Allowance and Spending Plan	US$ Expenses	US$ Income
Monthly allowance		800
Monthly expenses:
Cell phone bill (average usage is $80 per month)	80
Ordering takeaway/eating out 8 times per month @$20 each	160
Starbucks shake (15 days per month @ $4 per day)	60
Movies (1 time per month @ $20)	20
Going out for drinks (4 times per month @$30 each time)	120
Buying personal toiletries, clothes, shoes, etc	160
Saving towards buying the new iphone ($100 per month)	100
Saving towards next year’s trip	100
Monthly Totals	800	800

 

After 4 months when you will have purchased your iphone, you will have the option to go back to your daily Starbucks shake and also going to the movies twice a month and save the $100 per month towards your next year’s trip and the remaining $20 towards the purchase of your car.  After another 8 months, when you will be done with saving the trip money, you can save $120 per month towards buying your dream car.  By then you will already have saved $160 towards that and you have another 36 months to save $3,600 which is quite doable because you will be saving $100 a month, quite easily.  In addition, any extra cash you get for Christmas or for your birthday will give you the flexibility to save for something else you may want to buy, or spend it on other things.

Action Steps – Exercise 7 (10 minutes):

Ask the students what they think of the above spending and savings plan.  Would they do things the same way or would they do something else.  Continue with a discussion of the students’ answers.

6) Constantly check in and adapt your financial game plan if necessary  

Remember that this is a dynamic process, meaning it changes very often and doesn’t necessarily have an end point. You need to regularly assess your financial decisions and your financial standing at that point. It is quite normal to need to make changes and you should not be afraid to do so. It is a trial-and-error sort of process, after all.  You should recognize that having the necessary discipline, consistency and flexibility to stick to your plan, without being hesitant to change the things that don’t work, is the cornerstone for success in this endeavor.

Large asset purchases – buying a car

Large asset purchases come with both explicit and hidden costs. The first major asset purchase for most young people is their first car.  Before making such a big decision, using online tools like Kelley Blue Book, Edmunds, or Carvana can help you research car values, financing options, and total ownership costs.

When looking to buy a car, you have various options that come with different price tags.  New cars are usually more expensive than used cars.  Also, the brand of the car is a major factor of its price; the cost of a Ford is nowhere near the cost of a Ferrari!

When financing a car, key factors to consider include:

• Down Payment: A larger down payment reduces your monthly payments.
• Loan Term: Shorter loans (36-48 months) have higher payments but less interest, while longer loans (60-72 months) have lower payments but more interest paid over time.
• Interest Rate: Your credit score affects how much interest you’ll pay. Lower credit scores may result in higher interest rates, making the car more expensive overall.
• Total Loan Cost: A lower monthly payment may seem appealing, but stretching payments over a longer period increases the total cost of the car.

When buying a car, you need to balance the need and the want.  You are buying a car for your daily transportation needs which represents a necessity.  At the same time though, you want to buy a car with which you can experience the ‘ultimate driving pleasure’.  Given your budget, you will have to balance these two competing forces and decide on a car which will satisfy the basic need of transportation first and then the ‘driving pleasure’ aspect.  You will have to bear in mind that a car, no matter the brand, loses a substantial amount of its value once it hits the road.  Therefore, you need to be practical and choose an affordable and reliable car.

Beyond the purchase price of a car, you need to also consider these ongoing expenses:

• Gas or Charging Costs: Fuel prices vary; electric vehicles (EVs) have lower fuel costs but higher upfront prices.
• Insurance: Rates depend on your driving record, car type, and coverage level.
• Car Registration & Taxes: Annual fees vary by state/country.
• Maintenance & Repairs: Oil changes, tire replacements, and unexpected repairs add up.
• Parking & Tolls: If you live in a city, consider the cost of parking and road tolls.
• Warranties & Extended Coverage: Some used cars may require extended warranty purchases.

After you have estimated the monthly cost of the above incidental expenses, you need to add it to the monthly auto loan payment and this will represent your total monthly cost of owning a car.  Once you calculate this figure you will have all the relevant facts to make a decision as to whether you can afford the car or not!

The financial responsibilities of renting a place to live

Renting a place to live is often the largest monthly expense. A common rule is that rent should not exceed 30% of your gross income to ensure financial stability. Before signing a lease, calculate whether you can afford the rent along with additional living expenses.

The basic monthly rent payment is not the only cost involved when renting a place to live.  There are other expenses which are not included in the monthly rent payment and should be added to your monthly expense budget.  These expenses include:

• Gas & Electricity
• Water, sewer and garbage collection costs
• Renter’s insurance
• Repairs & maintenance
• Internet subscription

In addition to the above, you will need to pay an upfront cost for buying furniture and appliances depending on whether the apartment is furnished or not.  You will also have to put down a security deposit for the apartment which will cover a couple of months’ rent at least.  All of the above add up and if you do not take them into account when preparing your budget, you might end up in an unpleasant financial situation.

Tips for Negotiating Rent & Avoiding Scams

• Negotiate Lower Rent: If the unit has been vacant for a while or has minor issues, ask for a rent discount or free parking.
• Check for Rent Control Laws: Some cities have rent control policies that prevent extreme rent increases.
• Avoid Rental Scams: Beware of deals that seem ‘too good to be true.’ Always see the apartment in person before paying deposits.

When renting a property, it is important to be aware of your financial and legal obligations to the landlord.  Otherwise, you run the risk of losing your deposit when you move out and you may even face eviction.  Before you sign a rental agreement make sure you read it carefully, including all the small print. Your responsibilities as a tenant will vary. It is important to understand your rental agreement so that you know exactly what your responsibilities are.

Athletes’ salaries and the reality of uneven cash flows

If you make it to the pros, you need to understand the financial realities of athletic compensation.  Let’s take an athlete with the average career of ten years. During the first few years, the athlete is a rookie and is more likely to be paid good money, without having yet reached their peak contract. Half-way through their careers, at about the fifth to sixth year, athletes will probably be making more money than they can even imagine given that they’ve reached their peak of performance and fame and are able to leverage it through immense contracts. Towards the end of their careers, athletes still make good money, but they’re no longer considered as a future asset and thus their cash flow will be much lower from their peak contract, given that the younger generation of athletes will start taking over the big contracts. Finally, after ten years have gone by, athletes find themselves with zero income, a sudden and dramatic drop from their previous contract. In the cycle described above, there are about four -rather dramatic- changes in cash flows within ten years. This does not happen in any every-day job and this is what you need to be prepared to tackle, plus the fact that every season, the athletes’ budget needs to cater for spending during off-season when athletes don’t get paid.

You need to think of your income as the pizza you have delivered to your home on a Friday night; realize that the money you make in your career will practically compose your income in the future too. If you want to wake up to a nice Saturday morning brunch, which composes of left over pizza (something of course that no one recommends you do often for health and sport reasons) you will need to plan how many pizza slices you’ll consume on Friday night and how many you will save for the next morning. It is the exact same thing with the planning of your financial future, throughout your lifetime.

If you discipline yourself towards saving, no matter how much money you will make, you will achieve financial success in the long run. Even if you have times in your career where your income will be much lower than usual, you will still be able to cater to your needs and wants because you have been preparing for that time, through proper saving and financial planning.

Another important way to tackle the uncertainty of uneven cashflows is to create alternative sources of income, while you’re still a professional athlete. Investing your money in one, two, five or even ten-year investments, will generate cash flows at points in your life that right now you have no idea how much money you’ll be making, or if you’ll be making any at all. These alternative sources of income can act as a catalyst when it comes to making sure that you’ll be able to afford a good life, irrespective of how much you’re making at that time.

Having discussed the importance of planning and alternative investments, which together make up the majority of the solution to the issue of uncertainty, we should also discuss the prevalence of an unexpected financial setback, during or after your career. These kinds of setbacks happen, every day, to all of us and can take any form. Your investments may turn out badly, or your career may end earlier than expected; so, what do you do in these cases? You make sure that you have a proper insurance policy in place that will cover you from such setbacks. Insurance companies are willing to create any plan that will suit your needs and it’s recommended that you create a plan that covers such cases.

If you catch yourself laughing right now, or thinking that you are too young to consider these alternatives and that you are reading information that is useless to you, then you must rethink all the facts and realize that it’s never too early to start preparing for the next steps in your life. Your professional sports career could start as early as 21-years of age, or it could not start at all. It could end after a year, or ten, or twenty. You have, however, a full life ahead of you, so start learning how to prepare for financial success and accept the fact that you will undoubtedly need to do so, if you want to be financially successful.

Managing your money throughout the different stages of your career

As already discussed, the career and financial cycle of an athlete is different than that of any employee or business owner.  The peak of an athlete’s career along with the high earnings and substantial cash flows takes place early in the life of the athlete.  Hence, the athlete is required to have in place a financial plan which will cater for the post-sport retirement days.  Developing a personal financial plan early on, will not only allow athletes to control their financial situation but can enhance their quality of life by reducing the uncertainty they feel about money-related issues and future needs.

Financial planning must start from the first day that athletes sign their first professional contract, no matter how big or small such contract is.  Athletes need to set up a money management plan, which will be continuously updated to cater for the different stages of their sports career.  A professional athlete’s career consists of three different stages.  We will go through each stage below and for each stage we will identify the main objectives of the corresponding money management plans.

 

Stage 1:  The Rookie Days

This is where your career, cash flows and earnings begin.  In the beginning, these earnings are usually small but so are your expenses and obligations. This is the point where you must set-up a specific spending plan. Setting up a spending plan is an easy process which will help you acquire a clear understanding of your spending needs. Also setting up a spending plan will help you figure out how much money you can save in order to reach your long-term financial goals.  The process for drafting a spending plan is fairly simple: First you have to define what your take-home (or disposable) income is.  Then you should list the bills you have to pay every month, such as your mortgage or rent, car payment, insurance premiums, utilities and other living expenses. Once you have that, you can simply subtract your expenses from your disposable income.  If you’re close to zero or get a negative number then it means you have to take a second look at your non-essential expenses, such as entertainment and travel.  These items are easier to trim if you are already spending too much or if the money spent on those items is needed elsewhere.

The goal is to adjust your spending until you’re spending less than you make or are saving enough to meet your other financial priorities such as creating an emergency fund, paying off credit card debt and saving for retirement.

Stage 2:  The Prime Days

If things work out fine for you in your rookie days, you are now at the peak of your career and consequently at your top earning bracket.  With increased income, it’s tempting to upgrade every aspect of life—bigger houses, luxury cars, and extravagant spending. This is called lifestyle inflation, where expenses rise to match income. Avoid this trap by limiting large purchases, sticking to a spending plan, and focusing on wealth-building strategies.  It is understandable that there are certain things that you wish to purchase that you could not afford before and you may also want to upgrade your standard of living.  However, you need to always make sure that you spend less than what you earn and that you save enough money for the future.   Your main goals during this period should be the following:

• Eliminate any debt strategically:
  • Pay off high-interest debt first (credit cards, personal loans).
  • Consider the avalanche method (paying off the highest-interest debts first) or snowball method (starting with the smallest balances for motivation).
  • Avoid unnecessary new debt, even when income increases.
• Get proper insurance coverage
  • Health Insurance
  • Life insurance
  • Disability insurance
• Create your children’s college funds
• Create your retirement fund
• Start working on your investment portfolio

Stage 3:  Nearing Retirement

When you are nearing retirement from sports you have to start working on your transition strategy.  Usually, athletes are correctly advised that one of the things they must do is to create a parallel business into which they can transition when they retire from sports.  In addition to creating a parallel business, there are other things that athletes can do in order to create alternative passive streams of income.  With the guidance of a financial/investment advisor you can use one or a combination of the below, in order to create passive income inflows:

• Create a stocks/bonds portfolio

Build a stocks/bonds portfolio in order to create streams of income from dividends, capital gains and interest income.

• Invest in real estate

Investment in property can be transformed into a fully-fledged revenue generating retirement program, if done carefully and with a long-term view.  Investments in property can generate steady rental income and their long-term appreciation may be cashed-out when selling the properties.

• Index funds

Investing in an index fund means that the fund will handle matters like choosing specific investments which mimic a stock index, rebalancing your portfolio, or knowing when to sell or buy individual companies’ stocks so that you don’t have to worry about managing your investments.  In addition, history has shown that index funds tend to earn more than mutual funds in the long-run.

The key to achieving financial freedom through money management is determining your financial goals and setting up an appropriate plan to achieve them.  Different career stages and life circumstances will definitely necessitate regular updates to your money management strategy.  However, proper planning and constant monitoring will provide you with the tools to adjust your money management strategy to your career changes so that you maximize your wealth.

Action Steps – Exercise 8 (10 minutes):

• You have just signed your first big sports contract in the millions. What will you do with that money?
• Will you look for a financial advisor or you will put it off for later. Justify your answer.

Money management strategies for athletes

The phrase “Mo Money, Mo Problems” from Notorious B.I.G’s hit song perfectly describes the financial struggles of high-earning athletes. Many sports stars, including Mike Tyson, Allen Iverson, and Antoine Walker, earned millions during their careers but lost it all due to poor financial management.

At the same time, smart financial planning has helped athletes like LeBron James and Magic Johnson build long-lasting wealth through smart investments and diversified income streams. The difference? Money management strategies.

Along with their on-field success, athletes might find themselves in a position where they need to properly manage their increasing income very early in their career, without the help of proper advisors and without having the financial knowledge to do so. Smart money management is essential for achieving personal or family goals, not only at the beginning, but through all stages of your career and life, such as when you start a family, buy a house or start your own business.

There are unlimited ways and strategies to manage money. Below we propose 6 money management strategies that any athlete can easily implement, whether he or she is just shopping for food or actively trading in the equities market:

1. Track Where You Spend Your Money

To track your expenses efficiently, use budgeting apps like Mint, YNAB, or Monarch Money, which automatically categorize and track spending. Many banks also offer spending insights and alerts to help you stay within your budget. Whether you use an app or a simple spreadsheet, the key is knowing exactly where your money goes to control spending.

You can separate your expenses in needs and wants or be more detailed and separate them in categories such as entertainment, food costs, travel and transportation, etc. Total each category to see where your money goes.

2. Create an Emergency fund

Living paycheck to paycheck is not only irresponsible but it’s also very dangerous. Any decrease in your income, caused let’s say by an injury or termination of a contract with a team or a sponsor can bring havoc to your lifestyle and even worse, send you to a spiral of debt.

The rule of thumb to creating an emergency fund is to have about twelve months of living expenses in a very liquid account in case anything bad happens. An emergency fund is your financial safety net. The ideal amount is 6 to 12 months of living expenses, stored in a high-yield savings account (HYSA) for easy access and better interest rates than regular accounts. For athletes, who face contract uncertainties and injury risks, having a well-funded emergency reserve is non-negotiable. If you are the kind of person who needs gradual change, you can start by setting up an automatic deduction of 5% of your paycheck and transfer it to a separate emergency account. If you want to build up your emergency fund faster, you can increase this rate to a percentage you feel comfortable with.

3. Create alternative sources of income

You might have the feeling that the money you are currently receiving as a salary from your sports contract are more than enough to ensure you a lavish lifestyle now and after the end of your playing career. Unfortunately, that’s not usually true and there are many cases of athletes who went bankrupt after the end of their athletic career.  As an athlete you have the ability to earn off-the-field income by signing endorsement deals or setting up a parallel business; adding other streams of active income to your sports salary should be a priority for any athlete.

4. Automating your finances

The most difficult part of implementing and sticking to any money management strategy is finding the willpower to do so and making the effort. Being your own worst enemy in this case, you need to remove yourself from the equation by automating your savings, bill payments and investments.

Automate your finances to remove human error and temptation:

• Automate bill payments to avoid late fees and credit score damage.
• Set up automatic transfers for savings, investments, and emergency funds.
• Use robo-advisors (like Wealthfront or Betterment) to automatically invest your money based on your goals.
• Round up spare change using apps like Acorns to invest small amounts effortlessly.
  This ensures that wealth-building happens in the background, even when you’re busy playing.

5. Saving for retirement

Retiring does not always mean that you will stop working; it means not having to work for money.  To be able to do that, you need to create passive income through a retirement fund that will pay you a stable income every year for the rest of your life. To create such a fund, you need to start with a principal amount, $100,000 for example, which you will invest in a mix of investments that will give you a return of let’s say 5% a year, or $5,000. Then you pay yourself a lesser percentage like 4%, or $4,000 and leave the 1% to be reinvested.  If you start with a higher principal, let’s say $500,000, then 4% a year is $20,000.  Following the same rationale, 4% of $1,000,000 is $40,000 a year. Building a retirement fund that can produce income for the rest of your life should be the ultimate goal of any money management strategy.

6. Have a Plan and stick to it

Once you know how much money you earn and how much money you spend, you need to make a plan. This plan needs to align your financial goals with your spending habits.

For example, if you have just a few days a year for vacation and you love spending this time in a luxury tropical destination, you can easily fit the necessary cash outflows into your spending plan. But, if you have set as a priority to buy a house for your parents by the end of the year, then you will need to plan cutting expenses elsewhere and modify your long-term spending plan to accommodate such a large outflow.

Action Steps – Exercise 9 (10 Minutes):

Ask students whether they have already adopted any simple money management strategies in their lives and ask them to describe them.  Continue with a discussion.

Conditions that may affect your financial game plan

Recent global events, such as the financial crisis and the COVID-19 pandemic, have shown us that financial stability is never guaranteed. One day, income may be high, and the next, it may drop unexpectedly due to economic downturns, job loss, or personal setbacks. This is why preparing for financial uncertainty is essential for long-term success. One day you are earning high and the next you are earning low; one day you are earning a salary and the next you are without a job. Hopefully, this will not be the case for any of you and yes, the economy may be getting better right now, but it is a reality and a possibility that one day you may find yourself in this position.

If you are able to pursue a professional sport career, you should be prepared for the fact that each contract you sign will be different; if you are a professional athlete in the USA, especially in team sports, you will probably manage to receive the greatest earnings of your life in that specific time period. If you find yourself outside the US, your contract will be based on the financial conditions of that specific market and the particular characteristics of the sport you are in.

For example, if you play professional soccer in Europe, you will probably make more money than anywhere else in the world. If you are a basketball player, your best contract will be in the NBA and not in Europe. If you are a golfer, you will realize that a lot of countries in the world will not be able to offer you the opportunity to be financially successful. It’s different in each sport and each situation for every person.

You should be aware though that one year you might struggle to get a good contract, another year you might have an injury that causes you to stay out for a long time, therefore your next contract might not be up to the standards you would have liked. Also, endorsements and sponsorships can provide significant income, but they are not guaranteed. These deals depend on performance, public image, and market trends. Diversifying income streams—such as personal branding, media work, or investments—can help ensure long-term financial stability beyond sponsorships. Most importantly, a sports career has an expiration date and you need to remember that throughout your life, and plan accordingly for the day when you will no longer play sports.

The best way to tackle this situation is to be prepared for it. This is the case when you will have to make ends meet with uneven cash flows and a disrupted budget that needs to be adjusted. In such incidents, the best possible treatment is to have an emergency fund in place which should be allocated according to your budgetary needs alone.

Your financial game plan will be affected by several parameters in your life as you grow up. It could be the need to finance your own education in college, meaning that you will have to create financial resources for your education, usually by working your way through college, or taking out a student loan, which you will have to repay as you go along. Home ownership is another big issue, which will come up at a later stage in your life. You will need to plan on how to finance this need, as well as other personal and family needs such as the need to purchase a new car, or go on vacation, or start a business and so on.

The bottom line here and the take-home message is that you need to be prepared for any unexpected occurrences, or occurrences that come with growing up; the best way to be prepared is to have a well-balanced budget, a fully functional savings plan and the determination to be fully disciplined in the long term in order to avoid financial risks.

 

 

Action Steps – Exercise 10 (10 minutes): 

Please complete the following quiz based on what we covered today

• You should not bother with saving unless you are making over $30,000 a year.

1. True
2. False

 

• Please choose the correct statement:

1. Once you construct a budget you should just stick to it faithfully and you are set for the rest of your life
2. Once you construct a budget you should not only follow it, but also periodically review and update it.
3. Once you construct a budget you don’t really have to stick to it too much. It was just an exercise to get a taste of where you stand.
4. You don’t really need a budget.

 

• What should you do first?

1. Save
2. Invest

 

• What do you save for?

1. For your future
2. For fun
3. For Emergencies
4. All of the above
5. None of the above

 

• Why is it important to know the difference between needs and wants?

1. Because you should be spending money on wants instead of needs
2. Because needs go on the right-hand side of the budget while wants go on the left-hand side
3. Because that is when it becomes possible to distinguish between what you need to survive and what you want in order to have a good time, and thus construct your budget more efficiently and accurately.
4. It is not important

 

Answer sheet:

• b) False. Everyone should save. Since savings are proportional/based on percentages you decide, it does not matter how much you are making. Of course, you should always make sure that you cover all your basic needs first (not wants!).
• b) Once you construct a budget you should not only follow it, but also periodically review and update it. C and D are false, A on the other hand is not wrong per se but it is insufficient compared to b.
• a) Save. You should only invest once you have accounted for saving especially for emergencies.
• d) All of the above. There are obviously different values assigned to each option, however, as we previously discussed all of the above are good “causes” for saving.
• c) Because that is when it becomes possible to distinguish between what you need to survive and what you want in order to have a good time, and thus construct your budget more efficiently and accurately. When designing your budget, being able to differentiate between needs and wants provides you with a certain clarity and what you should and can do.

Lesson wrap-up

This lesson was anchored in the core principles of financial planning, money management, and financial decision-making. To gain a comprehensive understanding of these topics, we explored how and why financial planning must align with your goals and values, the importance of managing cash flow, differentiating between wants and needs, and implementing effective money management strategies.

The key takeaway from this lesson is this: The financial decisions you make today—how you earn, spend, save, and invest—will shape your financial stability in the next ten, twenty, or even thirty years. Careful financial planning, disciplined budgeting, strategic saving, and smart investments are the foundation of long-term success, especially for athletes with unpredictable income streams.

At this point the instructor should go over the learning outcomes stated at the beginning of the lesson and take questions from student athletes.  An open discussion on the concepts taught and how they relate to the student athletes and their greater life plan should be encouraged.