Sports are a reflection of life. Anyone who has ever played (or watched) sports at any level understands that lessons learned on the field can spill over into everyday living. And it’s just as true with money. Here are a few money lessons we have learned from watching sports.
A Wait-and-See Approach
There’s a new trend in Major League Baseball. After more than a decade of big-time spending on big-time players, the past few off seasons have been dramatically different. Now teams are taking a wait-and-see approach with stars, opting instead to sign lesser-known players to shorter-term contracts. Today’s teams are more reluctant to spend big to avoid the risk of a bad investment down the line.
This wait-and-see approach can be helpful in your own personal finances too. By delaying big purchases even just 30 days, you can save a lot of money. When you see something you want to buy, hold off on that impulse. Instead, wait 30 days to think about whether you really want it. If at the end of the month the urge is still there (and you have the money), reconsider purchasing it. In the meantime, you may have found that you don’t really need it after all. Or maybe you found something similar, but for less money.
This is what big-league front offices are doing with their teams. They are delaying spending and investing in similar projected production at a lesser price. It’s driving down the prices of some star free agents and teams are saving money in the short and long term as a result.
Play Moneyball with Your Money
Moneyball has officially taken over sports. Popularized by author Michael Lewis and the talent-scouting methods of the Oakland A’s, Moneyball means analyzing statistics to find ways to play smarter, not harder. By using undervalued players and finding more efficient ways to score and defend, smaller-market teams are competing with lower budgets. This concept has moved beyond baseball to influence the world of business and other sports as well.
As it relates to personal finances, there may be better, more efficient ways to manage your money. But the first and most important lesson from Moneyball is that you can succeed by living within your means. The A’s didn’t go out and spend money recklessly just to compete. They found smarter ways to compete by working within a set budget.
The official subtitle of Moneyball, “The Art of Winning an Unfair Game,” is also applicable to your personal finances. When some teams’ budgets exceed others by millions of dollars, baseball can feel unfair. The same is true in life when advantages are given to some and not others. No matter your advantages or disadvantages, you can level the playing field by being more efficient with the money you have and simplifying the complex. If there’s something about budgeting that’s difficult for you, find the flaws in the old way of doing things and re-design your personal approach to money management.
Life’s Little Curveballs
Like sports, life has a way of throwing curveballs your way - sometimes when you least expect it. You step up to the plate to meet your obligations. But after seeing a steady diet of fastballs, even a single curveball can throw a wrench in your financial plans. Luckily, sports comes through with another life lesson.
In baseball, the curveball is hard to hit partly because the batter isn’t expecting it. Of course, not all curveballs are created equal. And some are hard to hit even when they’re expected. But if you know a curveball is coming, it can be exploited. Being ready to adjust your swing, just in case you see the curveball, can give you a much better chance of success.
When you’re prepared for life’s curveballs with a financial plan for emergency expenses and periods of unemployment, you have a much better chance of coming out ahead. By budgeting and saving away a little emergency money every month, that unexpected car repair doesn’t have to set you back. And having a plan to pay down your debts and use your credit wisely will help you knock it out of the park the next time life tries to slip a curveball past you.
Sports in Perspective
The business of sports is a billion-dollar industry. So it makes sense that lessons about money management (both good and bad) can be learned from watching players, teams, and front-offices on the big stage. The next time you turn on the game or read about your favorite sports personalities in the news, look for the subtle ways you can learn more about your own money management.