2. Financial Psychology

Financial psychology

Key topic

Financial psychology relates to our behavior towards personal finances and financial decisions regarding money, budgeting, investing and so on. Family, society and culture play a huge role in the development of the athlete’s financial psychology.  Money is a social tool and our attitudes, beliefs and practices in relation to it are to a great extent influenced and moulded by the people who surround us.  In this lesson, we discuss how the pursuit of money is all about trying to meet either emotional or psychological desires; identifying and managing these desires will give female athletes greater control over their financial behavior.  Lastly, this lesson gives insights on financial mindfulness, helping female athletes develop awareness and control over their financial decisions.

Learning objectives

• Understand that our financial beliefs and behaviors are related to the general psychological principles of needs, wants and environmental influences and that such behaviors are influenced by family, society and culture.
• Realize that the athlete’s financial beliefs and resulting emotions usually direct her financial decisions. The athlete’s money personality influences her spending and saving habits.
• Become aware that financial behavior can change, once the athlete recognizes what constitutes bad financial behavior, understands her money personality and develops a strong set of financial skills.
• Seek proper help and support which will enable the athlete to withstand societal pressures and expectations regarding her financial behavior and take corrective action.
• Be ready to draw upon and utilize a number of athletic strengths to deal with and overcome financial setbacks.
• Develop the ability to make intentional, emotionally balanced financial decisions by practicing mindfulness techniques that promote financial awareness, control, and long-term stability.

Introduction

We have already discussed that you need to have a life plan in place, and we went over the skills you need to do so.  We have also talked about the challenges and hard realities that female professional athletes have to deal with and offered guidance on how to deal with such situations, if and when they arise.  Today we will discuss financial psychology and how it influences our money decisions along with the resulting effects on our life and financial plan.  Understanding how our financial beliefs have been formed, will give us greater control over our financial behavior.

A large number of female athletes with modest financial backgrounds and means, may come to substantial wealth when they turn professional. Their decisions on how to handle this sudden money are influenced largely by their financial beliefs and the expectations of society.  Financial beliefs and societal pressures exert a high degree of power over the athletes’ financial behavior and lifestyle choices.  With proper guidance and support, athletes can modify their financial beliefs and formulate winning financial strategies that can lead them to financial independence.

Financial beliefs and behaviors are rooted in psychology

Wealth is often created or destroyed based on our behavior.  Our financial behavior is rooted in our past experiences, our mindset and our beliefs about money, which can lead to irrational decisions based on emotional associations related to money.  Our past experiences shape what we perceive and feel about money, and they are linked with the financial outcomes in our lives.  Understanding the psychology of money can help us become aware of the origin of our financial beliefs and be able to create meaningful change in our financial behavior.

Maslow Hierarchy of Needs

According to humanist psychologist Abraham Maslow, our actions are motivated by the achievement of certain needs. Maslow first introduced his concept of hierarchy of needs in his 1943 paper “A Theory of Human Motivation” and his subsequent book “Motivation and Personality”. This hierarchy suggests that people are motivated to fulfil basic needs before moving on to other, more advanced needs.

Maslow used the terms “physiological”, “security”, “belonging”, “love”, “esteem”, and “self-actualization” to describe the pattern that human motivations generally move through. According to Maslow, the higher people climb up the needs-hierarchy, the better their lives will be.

If a person is suffering from heavy financial stress where does this person fall on the pyramid? If you are about to lose your home, you’re probably not thinking about self-actualization.

We see that financial issues place you in the lower levels of needs. You must first address these lower issues in order to be able to move to the fulfillment of the higher levels of need.

Action Steps – Exercise 1 (15 minutes): How would you spend $100,000?

a. Give the following instructions to the athletes:

• Pretend you have just received $100,000 to spend any way you please, with no strings attached.
• Take a few minutes to write down what you would do with the money.
• After you’ve figured out how you’d spend the $100,000, take a few minutes to explain why you’d spend it that way. For example,

• • If you’re going to save them, what are you saving for? (For example, I want to start my own business as soon as I retire)
  • If you’re going to buy something, what’s the occasion? (My sister wants to buy an apartment and I can help her out with that money, because she has always been there for me)

b. Identify motivation in spending.  Ask a few athletes to read out their answers to the following questions and initiate a discussion:

• What need did you fulfill by spending the money the way you did?
• At what stage of the Maslow Hierarchy of Needs do you think you are right now and why?

Now that we’ve seen how finances can fulfill different psychological needs, let’s think about how we’ve learned to use money to fill those needs in our lives. We’re going to step away from Maslow for a minute and talk about human conditioning.

Humans are conditioned to move away from pain and toward pleasure. Let’s think about that in a financial context.

• If you take pleasure in watching your favorite TV show or getting the latest iPhone as soon as it hits the high street, it’s easy to justify spending your money on items related to those
• If your favorite place for holidays is Hawaii, it’s probably easier for you to save money for tickets and accommodation for your next trip there.

These are all financial decisions that move us toward pleasure—we’re using money to get what we want. We also make financial decisions to avoid pain. The positive aspects of pain avoidance are things like using money to buy insurance to avoid the future pain of paying medical bills out-of- pocket; or putting money in savings to avoid the fear that comes when you get your paycheck and it’s less than you need to cover monthly expenses. The negative aspects come in when we avoid spending money wisely because it’s not as pleasing as spending money on fun. That’s how we get into situations where we spend $4 a day on coffee but don’t have anything saved for retirement.

Often the difference between making smart financial decisions and irrational financial decisions comes down to whether we’re conditioned to think about money in terms of long-term pain and pleasure, or short-term pain and pleasure.

• Someone who knows from life experience that it’s painful not to have enough money for rent or food or medicine will probably take steps to avoid that pain by saving, planning, and thinking about long-term
• Someone who has always been fairly comfortable in terms of meeting their physiological and security needs but uses money to reward themselves or loved ones—that is, someone who’s always used money to meet love and belonging needs—will find it pretty painful to cut back on spending money to buy

Action Steps – Exercise 2 (5 minutes)

Discuss the following scenarios and identify the level of need in Maslow’s hierarchy that each person is trying to meet and what that person’s motivation is, seeking pleasure or avoiding pain:

Discuss the following scenarios:

• Joanna wasn’t paid in the last two months by her club. She has enough savings to make her rent payment this month, but if she doesn’t get paid soon Joanna will have to choose whether to pay her electricity bill or her phone bill. Joanna cancels plans for the Christmas holidays with her boyfriend and asks her father to lend her some money. What level of Maslow’s hierarchy of needs is she seeking to fulfill? Would you say Joanna is seeking pleasure or avoiding pain? (Answer – Physiological needs & seeking to avoid pain)
• Every year, Anne’s teammates book tickets to extravagant destinations to celebrate the holidays. Some teammates go for the holidays in Europe, others to exotic islands like Bora Bora. Only one teammate once decided to stay home for the holidays, and everyone gossiped about her being stingy. Anna doesn’t particularly enjoy the holidays, but she still plans to celebrate at home with her family. What level of Maslow’s hierarchy of needs is she seeking to fulfill? Would you say Anna is seeking pleasure or avoiding pain? (Answer – Self-esteem & seeking pleasure)
• Paula is planning to start an after-school soccer academy for underprivileged children. She hopes the program will help inspire children to work hard and find their passion in football, just like she did when she started playing at age four. Now that Paula is a successful soccer player, she wants to inspire and help others. What level of Maslow’s hierarchy of needs is she seeking to fulfill? Would you say Paula is seeking pleasure or avoiding pain? (Answer – Self-actualization & seeking pleasure)
• When Henrietta was growing up, her parents lived paycheck-to-paycheck. She remembers not having enough money for new clothes or shoes, and even a few times when they didn’t have enough to eat. Now that Henrietta is an adult, she has a professional basketball contract. However, Henrietta always worries about what would happen if she had an injury. She still buys everything used and puts as much as she can into savings, just in case. What level of Maslow’s hierarchy of needs is she seeking to fulfill? Would you say Henrietta is seeking pleasure or avoiding pain? (Answer – Security needs & seeking to avoid pain)

Money and emotions

If a person has a lot of money, they may feel happiness and joy, whereas a person who does not, may feel stress and anxiety about not being able to pay their bills. There are, however, many unhappy wealthy people who are solely focused on money and miss out on time with friends, family, and life experiences because they are so focused on achieving their financial goals.

It’s important to identify feelings and to be aware of your emotions toward money as you develop your own personal financial literacy. One of the main reasons why relationships and marriages fail is because of finances and failure to communicate about money. How would you feel if someone you were close to spent money on luxury items instead of bills, or vice versa?

Emotions and money can also greatly affect your personal health. It’s unhealthy to constantly live under stress, as a person experiencing stress or anxiety tends to have an elevated heart rate. When you are in stressful situations or carry anxiety, you often neglect other areas of your life that help maintain good health—like exercise, good nutrition, and sleep.

To help us understand the emotions involved with money and making financial decisions, let’s see Robert Plutchik’s Wheel of Emotions theory which says there are basically eight emotions:

1. Trust → this also includes admiration and acceptance.
2. Fear → the feeling of being afraid, shocked, or scared.
3. Surprise → how you feel when something unexpected happens.
4. Sadness → feeling sad, grieving or feeling depressed.
5. Disgust → feeling something is wrong or dirty.
6. Anger → feeling angry or furious.
7. Anticipation → the sense of looking forward positively to something which is going to happen.
8. Joy → feeling happy, glad.

Dealing with your Emotions

Your emotions can cause you to make bad financial moves, and it is very important to:

1. Recognize your emotions for what they are, and
2. Take control of them instead of them having control over you.

Below, we set different types of emotions, how they may relate to financial decision-making and how to control them.

•  Anxiety

Anxiety could be pervasive, making you too conservative with your investments, your financial goals, lowering your self-worth.

Deal with it: Come up with one thing per day, to control the situation that causes you anxiety. If you are forgetful about your bills and you struggle paying on time, consider automatic payments, or set up calendar reminders that will alert you the day before the due day.

• Jealousy

If you are jealous of your friends or other people’s possessions then you might end up overspending and undermining your own budget as a result.

Deal with it: Stop thinking about others! Try to focus on what you have, not what you lack. Write down every day one thing that you’re grateful for. Soon enough, you’ll develop the mechanisms that will help you focus on the good things in life.

• Regret

If you beat up yourself all the time about a lousy decision you made in the past then you are stuck in the past. For example, if you are blaming yourself for not saving when you were younger and you think that is too late now, you may end up without any savings at all when you retire.

Deal with it: Channel your regret into a learning opportunity. Forgive yourself for the mistake and then focus on decisions that’ll will help you avoid taking the same missteps in the future.

• Embarrassment

You are out to dinner with a friend. You go for a cheap dish and your friend orders an expensive one. When the time comes for the check, your friend suggests splitting it, but you’re too embarrassed to say that she should pay more.

Deal with it: Be honest. Tell your friend that you’re looking to save money, and would prefer separate checks. If they are a good friend, they will understand and encourage you not to stress over it. On the contrary, if you’re in a social situation with maybe a new friend or someone who you aren’t as comfortable with, try to avoid budget-ruining scenarios right from the start. Instead of going to a high-end restaurant, go for a walk in a romantic place or go for a casual drink.

• Sadness

When people feel sad because of a troubling money situation, they avoid using money, they don’t want to think about, touch or spend money.

Deal with it: Find a trusted financial planner who can assess the situation and give you some options. A third party who can think clearly and who is also experienced in financial affairs can help ease some of the pressure as well—and knowing that things are under control may even help lift you out of your depression.

• Guilt

All of a sudden, you’re struck by luck and money, but instead of being psyched, you feel like you don’t deserve this lucky break. You start spending too much and you are too lavish with gifts for less fortunate friends and family.

Deal with it: Having a financial plan for your money is absolutely essential. Consider channeling some of your resources charitably. Arrange for let’s say 10% of your earnings for each year to help people in need, or go to a church or a charitable organization of your choosing, but limit it to that.

• Feeling overwhelmed

Feeling overwhelmed by a money issue can have disastrous results. For instance, if you’ve amassed huge credit card debt and don’t know how get yourself out, it can paralyze you and prevent you from doing what needs to be done.

Deal with it: Feeling overwhelmed may be the result of lack of control. You can begin by making a list of specific and realistic steps that will enable you to dig yourself out of the money situation you’re struggling with. As you slowly expand your knowledge about investments, bonds, mutual funds, securities, etc., you may start feeling more confident about it and that you are (re)gaining control of the whole situation.

• Overconfidence

While it’s great to have a positive and can-do attitude, optimism can undermine your finances if it transforms into denial. Overconfidence creates a fake reality.

Deal with it: Having a positive outlook can be crucial in overcoming money problems because it can equip you with the confidence to believe that you have what it takes to make it happen. Think of your financial progress based on numbers with realism. Optimism and a clear head can elevate you. When you know where you stand, you can then get your reason and logic to work.#

• Financial Therapy: When Emotions and Money Overlap

Sometimes, emotions related to money can become overwhelming or rooted in deep-seated beliefs and traumas. Financial therapy combines traditional therapy with financial education to help people work through money-related anxieties, guilt, or trauma. Athletes who find that financial stress is affecting their wellbeing may benefit from consulting a financial therapist to gain both emotional support and practical financial strategies.

Dealing with higher income and using it wisely

Athletes and the people who surround them make lots of personal sacrifices, for many years, for a young girl to gain professional status and be able to play sports for a living. Becoming a professional athlete can bring you fame and money.  Athletes usually make a great effort to prepare themselves physically and mentally to perform at top level in their sport. In contrast, the effort they put in to prepare themselves for dealing with the emotions associated with the changes in their financial lives when they turn professional, is almost never equal to their athletic efforts.

The gender pay gap in sports is heart-breaking!  As of the 2024/25 season, the average NBA player earns approximately $11.9 million per year, while the average WNBA player earns about $147,745 per year. The gap is similar but slightly smaller for golf and soccer, but even worse for baseball.  While tennis has made strides toward equal prize money in major tournaments.

While the pay gap is of course something that should be frowned upon, professional female athletes are still paid more than the average person which means that they should save, invest and plan for the future. The first important thing is to accept that sports careers are short, and certain contingencies might make them even shorter.

Although the increased cash flows usually come along with bigger obligations and expenses, you need to stay focused on your spending plan.  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.

So how can increased wealth affect an athlete? Many become overwhelmed and start to overspend. And athletes who tend to spend too much money on themselves, will often spend money on others too. Pressure for money – from family and people who helped them reach the top – can weigh heavily on athletes.

Dealing with higher income efficiently and effectively is not a problem exclusive to female athletes, or even athletes for that matter. The challenge is the same for anyone, trying to turn a high income to lasting wealth.  All life changes, including sudden shifts in finances can be traumatic; therefore, athletes should take things slowly and not rush into any big decisions. They should take time to adjust to the changes and think clearly to make the decisions that will serve them well in the long run.

To help them with these decisions, athletes should surround themselves with trusted financial professionals who can teach them how money can create options and show them that they can facilitate their dreams by creating a financial life plan and a budget based on their core values and lifestyle. This process helps athletes set their priorities and makes the adaptation to their newfound wealth easier. It’s a process of identity change, to a person who accepts having money as a resource, that can make all the difference.

Real Life Example (5-minute discussion) One of the most iconic figures in the history of WNBA and the first ever signing of the League was Sheryl Swoopes. Competing in the 80s and 90s Swoopes made around $50 million during her career from basketball and sponsorship contracts. However, by 2004 she declared bankruptcy. How did she get there? Poor choice of advisers and money management What does Swoopes’ case teach us?

Coping with family and societal pressures

Professional female athletes live a unique life because of the status and visibility they enjoy, especially nowadays when they have thousands of social media followers. We are also in the middle of an unprecedented rise in interest in female sports with everything it entails. The intense visibility that comes with social media presence can create significant financial pressure. Athletes may feel the need to project a lifestyle of constant luxury and success to their followers, leading to impulsive or excessive spending. It’s important to remember that what is shown online is often a curated highlight reel rather than the full reality. Staying grounded in your true financial goals — rather than feeling the need to meet external expectations — is essential for maintaining both financial health and personal wellbeing. It is a revolution in some sense as women are trying to close the huge gap between female and male competitions. We are still a long way from a level-playing field but there are encouraging signs. For example, in 2022, after years of advocacy, the U.S. Women’s National Soccer Team successfully negotiated an equal pay agreement, setting a historic precedent for gender equality in sports compensation. Such victories show that persistent efforts are making a real difference and empowering female athletes worldwide.

Nonetheless it is not a coincidence, as female athletes show formidable athletic skills and expertise whether they compete in professional leagues like basketball, football, cricket, hockey and baseball or in elite tennis, golf, the Olympics and so on. Even with the gender pay gap, they end up making hundreds of thousands of dollars, some of them even millions, and are drawn to a lifestyle of the rich and famous, living for the moment, and revelling in their fame and fortune. Very few are concerned about the financial implications of living in luxury and the financial issues that may arise from their unique lifestyle.  They do not realize that they can be luxurious in their lifestyle but maintain control over it.

It is common for athletes to let their athletic successes and sudden wealth affect their financial decisions, even though their earnings window is very small and their earnings are extremely volatile (e.g. risk of injury or bad off-field behavior). The statistics show that there is a great possibility that an athlete may end up broke. But what are the main aspects of an athletes’ lifestyle that may lead to financial distress and how can an athlete cope with them?

The most common mistake that athletes make, usually because of peer pressure, is spend excessively and irrationally their newfound wealth, to support a new, extravagant lifestyle which society expects them to follow.  It is very important for athletes to set and follow their own lifestyle that may be similar to the lifestyle they followed before becoming famous. Keeping up with the healthy habits of daily life and their regular routines, spending time alone, eating well, resting and keeping up with other responsibilities will keep them grounded and protected from external pressures. A structured lifestyle reinforces both financial and emotional stability.

Athletes may be expected to provide for their family, friends and others who have helped them succeed. It is not easy for athletes to say no as they feel an obligation towards these people.  Athletes should have strong professional support to guide them in handling these types of pressures in a rational, yet diplomatic way.

Society views wealth as a life goal and a solution to all problems. At the same time, there is great disparity in the way money is distributed between the population, creating hostility and mistrust towards people who have money and causing people of all income levels to view one another with mistrust.  Critics and media voices can launch all sorts of opinions, regarding the lifestyles of athletes and the way they spend their money.  The media often scrutinizes how athletes spend their money, sometimes glorifying excess or criticizing financial decisions unfairly. To manage this pressure, athletes should:

• Adopt a private financial strategy—not every purchase or investment needs to be public.
• Ignore social comparisons—each athlete has different career lengths, earning potential, and financial goals.
• Use media attention for positive financial messaging—some athletes use their platforms to promote financial literacy and smart investments rather than flaunting wealth.

Athletes should accept that people will have different opinions on their athletic skills and their character; this is the reality of being a pro athlete.  Accepting criticism as part of the game and not internalizing it, can help athletes cope with it.

Athletes should also be careful not to start using money as a substitute for intimate connections and for creating instant gratification emotions.  Studies show that many athletes fall into the trap of using money to fill emotional voids, whether through excessive shopping, gambling, or risky investments. Instead of relying on material possessions for happiness, they should:

• Invest in meaningful relationships that are not tied to their financial success.
• Find healthy outlets for stress, such as hobbies, community involvement, or mentoring younger athletes.
• Seek professional mental health support if struggling with the emotional effects of wealth and fame.

They need to keep a tight inner circle of people or friends with whom they have created real relationships, which are not based on their athletic and financial success. This inner circle can assist athletes in nurturing their emotions and stay grounded in their life and money management. Athletes can cope with all the stresses that come with their expected lifestyle with smart money management and by recognizing and overcoming the different lifestyle traps.

Real Life Example (5-minute discussion) Arantxa Sanchez-Vicario is one of the greatest female tennis players of all time. Having won 14 grand slams and being just the second woman to ever be number one at both singles and doubles at the same time, Sanchez-Vicario made well over $50 million during her career. She should have been set for life. However, she placed the handling of her wealth on her father and brother. They apparently channelled her money to off-shore accounts and engaged in dodgy financial dealings. In a lawsuit against them, she alleged that while she was forced to live on a €1,500 salary, her family lived an extravagant lifestyle. The accusations came in the mist of tax-evasion charges against the tennis megastar. What does her case teach us?

The importance of money and developing a strong set of financial skills

It is often said that money is the most important thing in the world. Is money as important as some people believe it to be or should we consider such people as simply overly materialistic? This is not necessarily true. Money itself, paper and coins are not important. What is important is that money can give you freedom and choices.

When you have money, you have the freedom to decide for things such as where you want to live or the choice to hire someone to do all the things you might dislike doing such as cleaning your house, cooking your meals or washing the dishes and instead use the extra time to do something you enjoy.  On the other hand, when you don’t have much money, choice may be something that you cannot afford. The choices available to you may not really be choices at all.

As an athlete, you have the potential to earn substantial amounts of money from a young age, either from your playing contract and prize money or by building and monetizing your image. There is a great possibility that these earnings will drop significantly after the end of your career, so it is paramount to prepare financially for any possible outcome.

Most athletes don’t get the chance to develop their financial skills through the usual education path that most people follow, because of their very busy training schedules or their choice to go professional before or during receiving higher education.  Because of their lack of financial education, many athletes trust others to manage their money—sometimes with disastrous results. Not all financial advisors have the athletes’ best interests at heart. Some have hidden fees, they make poor investment choices or even steal money.

• Always research financial advisors before hiring them.
• Never sign contracts without understanding all the terms.
• Get a second opinion before making major financial decisions.
• Stay involved in financial planning rather than blindly trusting someone else.

Developing strong financial skills can support both your motivation and the attainment of your financial goals as it allows you to choose the lifestyle you want to have, help people you care about, experience the freedom to do what you want, when you want to do it, live without the stressors and negative emotions often associated with financial struggles and make a positive contribution to society.

Money usually does not change who we are. What it does is magnify our personal traits inherent to our nature. If you have a mean and selfish disposition, you will have more to be greedy and selfish with. If you are caring, kind and loving, you have more to be thankful for and give. As Tony Robbins put it, “In the end though, what all of us are really after is not money, it is the feelings and the emotions money can create, such as empowerment, freedom, a sense of security and feeling alive”.

Financial skills are skills related to the understanding, evaluation and management of your financial resources and the creation of personal wealth.  They also relate to your capability to use relevant knowledge and understanding to manage an expected or unpredictable situation in order to solve a financial problem and convert it to a benefit or opportunity.  These skills can be acquired through financial education, and they include but are not limited to:

• Being a conscious consumer
• Creating a financial game plan (budgeting for career and post-career life).
• Understanding sponsorship & endorsement contracts (avoiding bad deals).
• Managing digital banking & credit monitoring (protecting wealth).
• Avoiding bad investments & financial scams (risk management).
• Building long-term passive income (real estate, business, diversified investments).
• Planning for retirement early (ensuring post-career stability)

• Planning your retirement

Real Life Example (10-minute discussion) In 2019, at the age of 24 Bhawna Jat became the first female race walker in the history of India to qualify for the Olympic Games. Her journey to the top, however, was by no means smooth. In an interview to Sportskeeda she said: “My father had only two bighas (less than 1.2 acres) of land in our village. There was a time when we used to eat just one meal a day because the amount, we produced on the farm was less. We all lived in a mud hut and I used to train in a small makeshift field near my house at night, so that the village elders wouldn’t come to know. I used to train barefoot then.” Jat was also caught training and was forbidden from continuing to. She also had to borrow money from local lenders for her diet and training. She kept training without an income until April 2020. What do you think Bhawna’s financial motivation in life would be? How will her motivation influence her lifestyle? How do you think Bhawna will feel when she is financially comfortable? Her motivation in life is to not have to worry about money. She is not concerned with being rich; rather, she just wants to have enough money so she doesn’t have to stress out about going to the grocery store or having money for lunch. She is now trying to change lives through her sport. What does this real-life example teach us?

Financial goal setting

Financial stability isn’t just about affording luxury—it’s about securing a future beyond sports. The right financial goals allow athletes to enjoy financial freedom while ensuring stability for the years ahead.

Goals define the action you must take to make your dreams real. Setting goals and priorities and then following through with active plans to make them happen, is the essential process for turning dreams into reality.  The process of setting and achieving financial goals is very similar to the experience of an athlete setting an athletic goal.  Similarly, if you choose to work with a professional financial advisor to create your financial plan, you are creating an athlete-coach-like relationship.

It is important to start the process by identifying your goals, which must be directly connected and in line with what is most important to you and what exactly you want out of life. Discuss your goals with your advisor and set dates for their achievement. Your advisor will then help you quantify these goals and help you build a plan around them. Your ultimate goals are not going to be achieved overnight so you will have to set intermediate goals with events and dates that will help you stay focused and enjoy small victories on your way to their achievement. Intermediate goals also provide a measure to check whether your plan is working or needs adjustments.

Athletes choose to work with a coach that can advise them on their training routine, diet or their lifestyle. Coaches are usually people with background and experience in the area of sports and have knowledge that can help the athlete move forward. Most importantly they hold athletes accountable; by reviewing their performance, keeping them on track and reminding them what their goal is and what it takes to achieve it. Working with a financial advisor follows the same logic. They are there to help you stay accountable to your plan and to provide you with an honest and objective assessment, so you will have to choose an advisor who you feel can understand your goals and has helped other people achieve similar goals.  It’s relatively easy to assess our current situation and figure out where we want to be.

The toughest part is what happens in between, the actual work to get there. Successful athletes are not always those who work the hardest or the longest but those who work the smartest. Investors, in the same way, should make smart and efficient financial decisions. A financial advisor will help you make the right adjustments to keep you on track in your journey to financial freedom.

Athletes have to maintain balance in their training, resting time and diet with the help of their coach. Your financial advisor will help you maintain balance in the factors that affect your financial plan, the amount of money you save, the time you have available to reach your financial goals, and your related risk.

The process of setting and working towards achieving your financial goals doesn’t need to be perfect. The path to success won’t be straight, and you will need to achieve intermediate goals and correct your course along the way. Your goal should be constant progress, following the steps we recommended above: identifying your goals, choosing an advisor that suits you, making smart decisions and maintaining balance to reach success.  The basic methodology to financial goal setting is quite simple.

The Six-Step Athlete Financial Plan:

1. Write down your personal financial goals (see examples below)
2. Identify Your Priorities – What financial goals matter most (security, investment, post-career plans)?
3. Set Clear Timelines – Define short, mid, and long-term financial targets.
4. Build an Income Strategy – Determine how contracts, endorsements, and investments will fund goals.
5. Implement & Track Progress – Use financial tools or advisors to monitor spending, savings, and investment performance.
6. Review & Adjust – Financial goals should evolve with career changes—adapt as needed.

To fully understand what financial goals are, we list some examples below:

• Saving for vacations
• Paying off credit cards and other debts
• Paying off your car loan
• Building an emergency savings fund
• Saving for a home improvement/renovation
• Saving for a house down payment
• Saving for college education
• Investing for retirement

Real Life Example (5-minute discussion) American gymnast and seven-time Olympic medallist Shannon Miller: “It’s great to have that ultimate goal, but regardless of what that long-term goal is, you have to set those short-term goals. Think about what you can do each and every day to make that long-range goal happen.” Marnelli Dimzon, former international footballer: “You should never stay at the same level. Always push yourself to the next.” Abby Wambach, coach and former football player, two-time Olympic gold medallist and one-time FIFA world champion: “You never know if you can actually do something against all odds until you actually do it.” Mia Hamm, former footballer, two-time Olympic gold medallist and two-time FIFA World Champion: “Somewhere behind the athlete you’ve become and the hours of practice and the coaches who have pushed you, is a little girl who fell in love with the game and never looked back… play for her.” Venus Williams, former tennis player and number one in singles and doubles: “Set realistic goals, keep re-evaluating, and be consistent.” What do you think about these statements?

Your money personality and how it affects your financial planning

Financial psychology is a science that comes to fill the gap between psychology and behavioral economics. But why should an athlete spend her precious free time trying and understanding what such a scientific term has to do with? It probably doesn’t affect her busy everyday life at all, right? The reality is that the exact opposite is true, as advertisers and marketers use scientific research in this field to tempt us consumers to spend our money on their products and services. Well, if it has such a great effect on the manner we spend our money, we definitely need to take some time to understand what it is all about.

All of us relate to money in a different way.  Things, such as what money means to us and how we behave in situations that require us to make a financial decision, define our relationship with money. This relationship is called our “money personality” and affects our overall finances.

Our money-management habits tend to fit into five money personality categories.

The Five Money Personalities and their characteristics, according to a recent article posted in Investopedia are: https://www.investopedia.com/articles/basics/07/money-personality.asp

1. Big Spenders – The Status Seekers

Big spenders enjoy luxury, high-end brands, and the latest technology. They often prioritize appearance and lifestyle over financial security, spending freely without much concern for accumulating debt. While they may be comfortable taking investment risks, their spending habits can lead to financial instability if not managed properly. Maintaining a balance between enjoying wealth and long-term financial planning is essential for this personality type.

2. Savers – The Cautious Planners

Savers take a conservative approach to money, focusing on financial security and minimizing unnecessary expenses. They avoid debt, prefer low-risk investments, and prioritize long-term stability over instant gratification. While this cautious mindset helps prevent financial mistakes, over-saving without strategic investment can limit potential financial growth. A balanced approach that includes calculated investing and wealth-building strategies can help savers maximize their financial potential.

3. Shoppers – The Emotional Spenders

Shoppers gain emotional satisfaction from spending money, often indulging in purchases even when unnecessary. They tend to enjoy finding bargains but may still struggle with overspending and accumulating debt. While some shoppers invest wisely, others focus too much on immediate gratification, jeopardizing their financial future. Developing self-discipline and a structured financial plan can help them strike a balance between spending and securing long-term financial stability.

4. Debtors – The Disorganized Money Managers

Debtors often lack financial awareness, spending more than they earn without tracking where their money goes. Unlike big spenders, they aren’t necessarily driven by luxury or status, but their disorganized financial habits can lead to overwhelming debt. Since they rarely plan for the future, creating a budget and sticking to a structured financial plan is crucial to avoid long-term financial struggles. Learning basic money management skills can help them gain control over their finances.

5. Investors – The Wealth Builders

Investors are financially conscious individuals who focus on making their money work for them. They take calculated risks, actively seek investment opportunities, and aim to achieve financial independence through smart wealth-building strategies. While they tend to be well informed about financial markets, overconfidence or risky investments can lead to financial losses. A diversified investment portfolio and disciplined financial planning help investors maintain long-term financial security.

Understanding your money personality allows you to identify financial habits, manage risks, and create a financial plan that aligns with your strengths and weaknesses. By recognizing these tendencies, you can make smarter financial choices and work toward long-term wealth stability.

Action Steps – Exercise 5 (5 Minutes):

• Have athletes pick out the money personality that describes them best and have a discussion in class on how it affects their lifestyle choices.

Financial setbacks and how to maintain a positive attitude

Financial failures and setbacks are unavoidable in life. It is true that we all had that time in our life when we had our financial hardships, sometimes mild and sometimes severe. What we have to realize is that the most successful people around the world are the ones who have failed the most to reach high, even if we only know and see the ‘they’ve made it part’ of their success and admire their achievements.

In today’s world, where we are flooded left and right with tons of information, we hear about financial success stories of individuals almost on a daily basis. It is natural to compare ourselves and our situation to theirs and feel ashamed of failing or not achieving as much financially, at a personal level.  Such feelings of shame though may lead us into the darkness of depression.

As an athlete you must have had your fair share of failure; and you have learned to deal with it and move on because this is how the game of life is. The same attitude should be applied to your financial life and the financial difficulties you are encountering.  The British novelist J.K. Rowling, expresses her opinion about failure with the most inspirational quote: “It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all–in which case, you fail by default.”  Therefore, when faced with financial setbacks, stand-up, gather your pieces and rise from your ashes by just following the below four small steps.

STEP #1. ACCEPT IT

The first and most important step for financial recovery is to accept reality!  Accepting any situation in life makes you understand that a setback or a failure is not your final destination, but a stepping-stone in your journey to financial freedom.   You have to realize that failure is part of the process of succeeding. Yes, you will experience difficulties, you will repeatedly get disappointed and upset, but you have to stay focused on your target and not let it bring you down.

STEP #2. “UNBLOCK” YOURSELF

After the acceptance stage, there is always an emotional stage which must be handled really carefully and with full awareness of the situation.  After you have taken some time to realize and accept the situation, you have to clear your mind from any negative thoughts. Don’t let yourself be overwhelmed with feelings of misery. After all, once the harmful emotions finally dissipate, you will then be able to see clearly and turn your focus to recovery.

STEP #3. REFLECT

Reflection is a synonym for thought, meditation and consideration. Three words with high importance for every person who wants to operate under the control of their own power and who wants to learn from their mistakes and not repeat the same action again and again and expect a different result.  Reflection might be the most critical step, and many people do not take it seriously.  It’s simple but invaluable. You have to take some time to reflect on what happened and it is extremely important to be honest with yourselves on why it happened. When you reflect on something, you obtain the skills to answer these three vital questions:

• What went wrong?
• Why did this go wrong?
• How can I fix it?

 

 

STEP #4. TAKE ACTION

Your actions are what actually define you as a personality.  Nothing actually happens, until you take some action.  It’s not about just thinking and dreaming.  The actual work is that you have to make the right decisions and act wiser without falling into the same trap. Your actions are what will lead you to achieve your goals and success.  Many people envision improving their finances, but how many of them really act? And that is what makes all the difference.  The difference between successful people and unsuccessful ones is the capability to steadily and consistently convert their ambitious thinking into actions toward achieving their goals.

Using your athletic strengths to overcome financial setbacks

Financial setbacks and difficulties are something that all of us encounter at some point of our lives.  To be able to deal with these challenging financial situations, we all try to draw upon our experiences and strengths to bounce back as quickly as possible. Athletes are no different than the rest of us in this respect; they also try to use their strengths to deal with financial distress.  What is different though in the case of athletes, is that during their athletic training they have developed a unique set of strengths, unlike most of us, which if used properly, can help them get into a positive recovery mode faster.

Let’s take a look at these unique athletic strengths and how athletes can apply them to financially challenging situations in order to expedite the recovery period and have positive results.

1. Resilience – Throughout their athletic career, athletes must have failed more times than they have won. They realize that this is how life is, and they always get up and keep going, because very soon, there is another game or another competition to be won.  There is no time for self-pity; they have a situation, and they need to deal with it immediately and move on!  Resilience is one of the important traits in situations of financial difficulty as it gives the person the strength and the insight needed to move on quickly; athletes have an advantage because they have already cultivated and possess this trait, so they can get a head-start due to their ability to bounce back quickly.

1. Focusing on the target – Also, particular to athletes, is focusing on a target. Because athletes have been winning and losing their entire life, they have learned to eliminate external influences and focus on the target so that they win the game.  In consequence, they do away with all the negative emotions associated with failure-like situations fast and they focus on how to win the next game.  Drawing upon this strength can help athletes minimize the negative emotions arising from financial distress and focus on devising a recovery plan.
2. Self-reflection – For athletes it is common practice to reflect on the results of the performance during game breaks and after the end of the game, to assess what was done right and what went wrong. Self-reflection helps athletes reflect and analyze the financial challenge they are faced with, to assess what went wrong and how to prepare themselves to do things differently to turn around the undesirable situation.
3. Collaborating and following instructions – Most athletes are part of a team. As team members they have learned how to receive tough feedback from their coach and coaching team and how to follow instructions.  These skills are important when faced with a financially challenging situation because in most cases, you will have to create a team of professionals with whom you will collaborate and whose instructions you will have to follow to get out of the rat-hole!
4. Getting into an effective state of performance – When under pressure, elite athletes make sure they get the performance they want by being able to shift their body and mind into an effective state of performance. How do they do that?  They tip the balance in their favor by visualizing past and future successes to increase self-confidence, they develop consistent pre-performance routines to increase perceived control, and they make sure their goals are set towards success and not against avoiding failure.  All these are learnable techniques, and they can be applied to a multitude of stressful situations including financially challenging ones.
5. Self-Control – Research shows that self-control is a decisive factor that enables athletes to transform their workout intention into actual workout behavior. Regularly exerting self-control strength in one situation can have a positive self-control effect in various situations.  The self-control strength that athletes cultivate by training throughout their entire athletic career can be applied when they find themselves in a negative financial situation, to restrain their spending and change their spending habits.

7. Work Ethic – The best athletes have become the best because they have perfected their skill by perfecting their work ethic. They know that to be successful, they need to work long and hard.  The effects of financial failure can be devastating and along with resilience and devising a plan to come out of it as soon as possible, a lot of hard work is required from the athlete’s part.  Having a strong work ethic helps athletes put in the hard work necessary to overcome financial failure.

In addition to the transferrable athletic strengths identified above, there are many more athlete-unique traits that athletes can draw upon when faced with financially challenging situations.  These traits include persistence, attentiveness, organization and so forth.  All these strengths, skills and traits, inherent to and because of athletic training, can be transferred and utilized by athletes in all sorts of challenging situations and they give the athlete the tools to deal with such situations more effectively and come out a winner!

Financial Mindfulness

Financial mindfulness is the practice of being fully aware and intentional about your financial decisions, rather than making choices based on impulse, stress, or outside pressure. Athletes often face intense financial situations, including sudden wealth, external expectations, and personal financial anxieties. Without mindfulness, these challenges can lead to overspending, poor investments, and long-term financial instability.

Mindfulness is about pausing, observing, and making conscious choices that align with your financial goals and values. Many financial mistakes happen when decisions are made in an emotional or reactive state. Whether it’s an expensive impulse purchase, feeling obligated to support family and friends, or trying to match the lifestyles of teammates, a lack of mindfulness can lead to financial stress.

One of the biggest risks athletes usually face is emotional spending—using money as a way to cope with stress, excitement, or external pressure. Some common emotional spending triggers include:

• Peer Pressure: The desire to match the spending habits of friends, teammates, or influencers.
• Status and Image: Feeling the need to show success through material purchases.
• Stress Relief: Buying luxury items or experiences as a way to escape financial anxiety.
• Obligation: Guilt-driven spending on family or friends who expect financial support.

To develop financial mindfulness, athletes must practice intentional financial habits that allow them to take control of their money, rather than letting money control them. One way to achieve this is through the Pause and Reflect technique:

1. Pause before making a financial decision—whether it’s a large purchase, an investment, or a financial commitment to someone else.
2. Reflect on the reason behind the decision. Are you making this choice based on logic, long-term goals, or short-term emotions?
3. Act intentionally by making a conscious decision that supports your financial stability rather than reacting to external pressure.

Practicing mindfulness in financial planning also means being present when making financial choices. Instead of worrying about past financial mistakes or stressing over the future, focus on making the best decision in the moment based on clear financial reasoning.

A mindful approach to money also includes budgeting with awareness. Instead of viewing a budget as a restriction, you can see it as a tool that enables financial freedom. This shift in perspective helps athletes develop a healthier relationship with money, recognizing that financial planning is about creating choices rather than limiting them.

Another key aspect of financial mindfulness is gratitude and financial awareness. Instead of focusing on what you don’t have or what others are spending, appreciate the financial security you are building through smart decisions. Regularly reviewing your finances with a clear, calm mindset helps in making adjustments where necessary, without fear or panic.

By incorporating financial mindfulness into daily life, athletes can develop the ability to:

• Make financial decisions without emotional influence.
• Resist impulsive spending by focusing on long-term financial stability.
• Manage financial pressures from family, friends, and society with confidence.
• Cultivate a mindset of financial control, ensuring a stable and secure future.

Financial mindfulness is a skill that takes practice, but it is one of the most valuable tools an athlete can develop to ensure lifelong financial success.

Lesson wrap-up

Today’s session covered key financial psychology concepts that are essential for athletes to build financial security and long-term success. We started with the sudden wealth phenomenon, examining how athletes can manage rapid financial changes wisely to avoid common pitfalls. We also discussed coping with family and societal pressures, emphasizing the need for setting financial boundaries and maintaining privacy in financial decisions.

From there, we explored the importance of financial skills, highlighting how budgeting, investing, and financial planning play a crucial role in long-term wealth preservation. We moved on to financial goal setting, where we discussed short, medium, and long-term financial planning strategies, emphasizing the Six-Step Athlete Financial Plan as a framework for success.

We then analyzed money personalities, allowing athletes to identify their own financial behaviors and adjust their financial strategies accordingly. Recognizing whether one is a Saver, Spender, Shopper, Debtor, or Investor helps athletes develop better money management habits.

In dealing with financial setbacks, we highlighted the importance of resilience, adaptability, and taking proactive action. Athletes can use their natural strengths—such as focus, discipline, teamwork, and work ethic—to overcome financial difficulties and rebuild stability.

Lastly, we introduced financial mindfulness, a key tool in making intentional financial decisions rather than reacting impulsively to external pressures. By practicing awareness, self-control, and gratitude, athletes can take full control of their financial future while reducing financial stress.

At this point, we will wrap-up today’s lesson.  First, we will go over the learning objectives of this lesson and we want your feedback as to whether they have been achieved, and then we will address any questions you may have.  Please feel free to ask anything you’d like in relation to today’s lecture and we would love to hear how the concepts we discussed today relate to you and your greater life plan.