About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C. area that works with clients virtually across the country. Lamar's work with his clients focuses on budgeting, employee benefits, paying down debt, buying their first home, and investing. Lamar is the Founder of Dream Financial Planning, a virtual Fiduciary Financial Planning firm specifically designed to help young professionals and minorities take control of their finances and fulfill their dreams. Feel free to schedule a complimentary consultation to learn how we use the DREAM Financial Planning Process ™ to help our clients achieve their goals.
The 2020 Tokyo Olympics taking place from July 23 through August 8. Over 11,000 athletes competed. As I watched my favorite summer sports over the previous two weeks, it's easy to see why we see athletes almost as superheroes. I hope you had an opportunity to watch all your favorite athletes compete. The track and field events are always my favorites, so it was great to watch Allyson Felix win her 11th Olympic medal, making her the most decorated American Olympian in track and field history. I also enjoyed watching Simone Biles compete in her final Olympics and the Men's Basketball team winning another gold medal. These men and women undergo years of rigorous training, develop astounding mental strength and achieve nearly perfect physical peak performance.
As I was watching the games, I remembered that there are lessons we can all learn from these athletes - even lessons we can apply to our financial fitness. The mindset with which you approach your finances actually 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 goals are the same; if you don’t lay the groundwork for your financial future by establishing goals and priorities, the financial future you want won’t be guaranteed.
Short-Term vs. Long-Term Goals
Athletes often have both short-term and long-term goals; a young track star may have a goal 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 an eventual 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?
Yet of course, 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.
Even if you’re working with a financial advisor, you don’t have the equivalent of a coach that can bench you for failing to have discipline. An advisor can draw those lines for you, but you ultimately need to carry the will to follow through.
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
The best athletes don’t give up, even when they fail; they stay committed and focused on their goals. Your finances can be unexpected. Even though having a financial plan is vital, things happen that we can’t possibly account for.
Don’t be discouraged if you do 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.
Dream Financial Planning Process ™
Whether you're managing student loan debt, starting a family, or considering buying your first home, the DREAM Financial Planning Process™ is tailored to the unique needs of busy professionals in their 30s and 40s. This process focuses more on short-term goals while you grow and evolve in your personal and professional life. So if you're looking for guidance on Financial Planning, optimizing employee benefits, budgeting, student loans, and managing your 401k or investments, we can help.
With uncertainty surrounding the economic stability of our country, it's okay to have fears and anxieties surrounding your own savings and investments. The most productive course of action from here is to reach out to Dream Financial Planning (or whoever your trusted advisor might be) and discuss your options. It's easy to have knee-jerk reactions when it feels like the bottom is falling out, but it is imperative to make decisions using research-backed data and a level head. If you'd like a Complimentary Review and risk assessment of your investment portfolio, feel free to send me an e-mail.
In the August Newsletter, I explore how you should invest money for your short-term goals after you've established an emergency fund. I also discuss how a Financial Advisor can help you avoid emotional decision-making with U.S. News and World Report and how to know if your Financial Advisor is the right fit for you. There are also blog posts where I outline how to complete a mid-year financial check-up and 5 college planning mistakes to avoid.
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