Creating a budget

    Whether you are a multi-million-dollar player or an athlete at minor levels, being aware about what you are spending on a monthly basis is most useful. The best and the simplest solution to remain financially stable is to create a budget and monitor it at regular intervals.

    Here are the steps to creating a personal budget:

    • Gather your financial statements

      This includes bank statements, investment accounts, monthly bills, and any information regarding a source of (monthly) income or expense.

    • Record all of your sources of income

      This should include all your income. Using the net income is fine if your taxes are automatically deducted. It is better to underestimate than overestimate when listing sources of income.

    • Create a list of monthly expenses

      Track and write down all expenses you incur over the course of a month. Include everything that you spend money on and don’t forget about variable expenses (for example, expenses that fall once a year). This time it is better to overestimate than underestimate.

    • Total your monthly income and monthly expenses

      If the result shows more income than expenses, you are off to a good start. If not, you will have to make adjustments as your current lifestyle is not sustainable in the long-term.

    • Adjust and review

      It is important to monitor your budget over time as you might find expenses that you can cut down on or experience an increase in income.

    How to stay out of financial trouble

    To build wealth and reach financial independence, you simply need to spend less than you earn. It is an easy concept to understand, but sometimes it might be difficult to execute. Here are some hints to protect yourself and avoid financial problems.

    • Hint 1: Use credit responsibly

      Easy access to credit is one of the biggest reasons for overspending and you can get in deep trouble if you are not careful and start charging things you don’t have the cash to pay for. It feels like free money, but it is not: credit is borrowed money that you will have to pay back with interest. If you misuse credit you may find yourself with monthly bills that you cannot pay.

      In general, it is only worth making purchases on credit if it is something that will be beneficial for the long-term (mortgages, education payments, etc.). Beware of minimum payments, they often give a false sense of achievement and your money continues to collect interest.

    • Hint 2: Get the right insurances

      In order to protect yourself from unexpected financial problems it is best to insure yourself against the unexpected. As an athlete you should insure yourself, your career and your investments. Imagine yourself in the very worst-case-scenarios and insure yourself against any of these scenarios happening. The better prepared you are for the unexpected, the less likely it will damage your financial stability and future.

      Note: Insurance coverage can be very different from one country to another, so seek professional advice from your own advisor or bank to guide you through choosing the appropriate types of coverage.

    • Hint 3: Plan for the future An athlete’s career is usually substantially shorter than the average person’s career. As a result, it is very important to properly prepare for your retirement as an athlete. To do this, you can consider the following:

      • Start saving from your first pay check

        Remember that your career is quite short and it could be dangerous to spend all your money while playing professionally.

      • Invest in education

        Having a stable financial future after your playing career is over can only be done if you have taken the time to educate yourself properly (for more information about your options, see: Education).

      • Figure out how much money you will need for the future ​​To assess your personal situation, it is best to seek advice from a professional. Be aware that retirement plans can be very different from one country to another.