Dealing with money feels hard, complicated, uncomfortable. I don’t mean spending it. I mean managing it, investing it, budgeting it, deciding what you can and cannot afford, talking to your partner/spouse about it. Just dealing with it!
On top of all that are the expectations – You’re a professional athlete, right?
You should be able to treat everyone to dinner or they’ll think you’re stingy. You should be willing to invest in this person’s opportunity and help that one out of a jam. Because, hey, you’re rolling in the dough! How about sharing that good time!
It can all make dealing with your money overwhelming – to the point where you just want someone else to handle it. But that can be dangerous without oversight. How many stories have we heard about athletes losing everything to unscrupulous money managers or even family! If you just hand it over, you can be taken for a ride.
So, what’s a money smart athlete to do?
Why does it feel so hard?
Here’s what you need to understand. People’s relationship to money is entangled with so many unconscious beliefs, ideas, memories and emotions. And those beliefs are running the show!
As a result your approach to managing money is cluttered. It isn’t simple. It’s often filled with inaccuracies, misconceptions and fear. Clients often tell me they feel like money is a great mystery covered in darkness. This murkiness gets in your way of being smart about your money.
But money is really very simple. There is one thing you can count on –
The numbers don’t lie and the truth will set you free.
So, how do you deal with all that clutter, all those fears, uncertainties, and old beliefs? I recommend a 3 step process:
- Get Conscious
- Get Real
- Get Busy
Get Conscious About Your Money Mindset
You have beliefs, expectations and assumptions about money and in particular about your abilities around money and finance. Most of those beliefs are unconscious. So the first step is to get conscious about them.
I have several processes that I use with private clients to do this. You can read more about them in my Build Your Financial Foundation Workbook. But for today, let’s start with this one –
Write Your Money History
This process is a simple writing process. Ask yourself these questions:
- What are your earliest memories about money?
- What are your earliest memories around your parents/guardians/family with regard to money?
- Do you have childhood stories of earning money? Losing money? Stealing money (or being stolen from)?
- Do you have memories of fights about money? Failures around money or failures around math? (you’d be surprised how many people connect money and math!)
Write them down. All of them. As much as you can remember.
Then think about this – what lessons did you learn from each experience? What “truths” or beliefs did you develop from each experience? Write those down, too.
Now, think about your life now – can you see ways that those beliefs are affecting how you think about money now? Do they explain behavior that you’ve found confusing in yourself?
If you’re married or in a relationship – have your partner do the same. And then meet together to talk about it – do these stories explain behavior around money that didn’t make sense in the past? Do you find yourself having more empathy for your partner and more forgiveness for yourself?
Get Real About Your Money
There’s one thing you can count on with money – you can’t argue with the numbers. They are what they are. Knowing your numbers will empower you to make money smart choices, choices that can ensure lifelong security for you and your family.
Here are the reports I recommend you create:
- Cash Flow Statement – exactly how much are you bringing in and how much are you spending each month. Do this for a minimum 3 months to start. Don’t guess. Track the actual dollars spent. You will use this information for creating a budget/spending plan. You may also want to do this in 2 phases – in season and off season – as both your income and your expenses may change significantly during those two phases of the year.
- Assets and Liabilities – What do you own and what do you owe? This includes real property (the value of the property is the asset, the mortgage and/or liens on the property is what you owe), bonds and equities (including IRA and 401Ks), interest in businesses, cash, collectibles and jewelry, equipment and the contents of your home(s). It also includes credit card debt, student loan debt, HELOCs or any other kind of debt, secured or unsecured.
- Profit and Loss statements – For any businesses that you are involved in, you want to do a P&L for that business. This is basically a cash flow statement but for the business. Be sure you include payroll, taxes, and all expenses including COGS (Cost of Goods Sold) in your P&L statement.
I have more information and samples of these reports in my Build Your Financial Foundation Workbook.
Creating these reports will give you a solid sense of where you are financially. If you have a financial planner or business manager on your team, ask them for help in gathering your numbers. If they resist, fire them. They should have these numbers at their fingertips. If they don’t, they aren’t doing their job – or they’re hiding something from you. Where possible, double check their reports – login to your portfolio or bank accounts to verify their reports.
And while you’re doing the forensic work on your money – notice what you are thinking/feeling. What are you saying to yourself about your money? What are you saying to yourself about your financial skills and literacy? How does this feel?
Is it confusing, frustrating or frightening? If so, you have some beliefs around money, or around yourself in relationship to money, that are undermining your power. See if you can identify those beliefs, and begin to choose different beliefs.
Is it, on the other hand, freeing, exciting and inspiring? Ask yourself – what beliefs am I thinking/believing that make me feel this uplifted? You want to reinforce those beliefs!
Get Your Mind and Your Money Working for You
Now that you know what your beliefs are and what your numbers are, it’s time to make some decisions about what you want and where you’re heading:
- Shift your beliefs about yourself and your capabilities. (This can be hard on your own – you can work with a coach to help you make these changes.)
- Create goals for your spending, investing, saving, and tithing – also called a budget or spending plan.
- Enroll your spouse, your family, and your business team in meeting those goals.
And most importantly – hold yourself, your family and your team accountable to these changes. Review any future decisions through the lens of these new beliefs and new goals and hold your boundaries when you are feeling pressured to spend, invest or rescue someone.
If you do these things – you can create a strong, financially stable foundation for yourself and your family. And from that foundation, you can make a bigger impact on your community and ensure your legacy.