For two weeks, people around the world watched the 2020 Tokyo Olympics, with over 10,000 athletes competing. As we watched our favorite summer sports, it was easy to see why athletes are viewed almost as superheroes. These men and women undergo years of rigorous training, develop incredible mental strength, and achieve nearly perfect physical peak performance.
We can all learn some lessons from these athletes - even lessons we can apply to our financial fitness. The mindset with which you approach your finances isn't so different from an Olympian's approach to their sport.
Defining Your Goals
All athletes develop tailored goals to put them on the path to success. Financial objectives are the same; if you don’t lay the groundwork for your financial future by establishing goals and priorities, the financial future you want isn’t guaranteed.
Short-Term vs. Long-Term Goals
Athletes often have both short-term and long-term goals; a young track star may have a target for their next meet while simultaneously working towards Olympic trials far into the future.
When it comes to your finances, you want to think long-term. Those goals could manifest through a retirement savings account or perhaps a college fund for your children. What do you want your financial reality to look like in the long run? What can you do now to make it happen?
Establishing short-term goals is also crucial to your finances and intermingles with these long-term goals. For example, you might say, “I am only going to spend ‘x’ percent of my paycheck this month,” or “I am going to set aside ‘x’ amount of money every month to save for a vacation next year.” By consciously thinking about your goals and how you can attain them, you’re already one step closer to financial fitness.
Athletes are notorious for the hard work they put in. Staying in peak physical condition and aiming for constant improvement requires immense discipline, as does staying in peak financial condition.
Most people don’t have a coach who can bench them for failing to have discipline. A financial advisor can draw those lines for you, but you ultimately need to have the willpower not to cross them.
This is especially true when it comes to your spending habits. When you have a budget, stick to it without exceptions. Once you make an exception, it becomes easier and easier to keep doing so. Your goals are nothing if you don’t harbor the discipline to make them a reality.
Stick With it
Even when they fail, the best athletes don’t give up; they stay committed and focused on their goals. You will experience the unexpected with your finances. Even though having a financial plan is vital, things happen that we can’t possibly account for.
Don’t be discouraged if you happen to go over budget or your investments aren’t doing well. Just like an athlete: pick yourself back up, refocus, and keep putting in the work to reach your financial goals.
Erickson Braund is the Founder and Chief Financial Officer at Black Walnut Wealth Management. He is a Certified Financial Planner®️ professional and a Chartered Retirement Planning Counselor®️. Eric brings over 20 years of experience working with high net-worth individuals and families, helping them achieve their goals of protecting and growing their wealth for retirement and for generations to come. Because Eric is a CFP®️ professional, he adheres to high ethical standards and engages in at least 30 hours of approved continuing education in the financial industry each year.
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