I was listening to the radio the other day and heard a staggering statistic: 78 percent of all NFL players are in some sort of financial distress three years after leaving the NFL. While divorce was cited as the most common cause, â€œbasic financial irresponsibilityâ€ played a large factor. While I donâ€™t know what the exact definition of â€œbasic financial irresponsibilityâ€ is, I can only imagine it means a lack of planning and a lack of a basic budget. I got to thinking, were those NFL players much different than our newest Airmen? Really not, some are right out of high school into the work force, others with four-year college degrees, each with some training in financial management, whether at a rookie symposium, First Term Airmen Center, or Air and Space Basic Course and we still see financial mismanagement issues. So the moral of the story is whether you make $4 million, $400,000, $40,000, or $4,000 a year, play in the NFL or are an E-1, you need to have a plan for living now and living later. The NFL has refused to invite me to this yearâ€™s rookie symposium, so I am going to give you a money management technique in hopes of reaching a few Airmen.
I wouldnâ€™t say that I donâ€™t like money, I just donâ€™t like talking or worrying about it. If you love to budget, check the market every day, and live and die by the prime lending rate, my technique is not for you. My knowledge of investing, retirement planning and budgeting is limited yet functional. I am as far from a certified financial planner as you can get, but I am on the way to the financial goals I set for myself as a second lieutenant almost 18 years ago.
My basic strategy revolves around something I learned at a young age, if I had money in my pocket I would spend it. No saving up for the big toy, if I had $2 I needed to go find something to spend $2 on right away. I quickly realized that if I had any intention of saving money, it needed to stay in my parentsâ€™ wallet. I used the same approach when I developed my financial plan â€” donâ€™t let it touch the bank account. Anything that is a required, recurring payment never makes it into my bank account.
Along with the mortgage and car payment, I have a separate account for power, gas, water and cable. All of that money is handled by an allotment of some sort and is never in a position for me to squander it away and get into trouble. Once the â€œliving now moneyâ€ is taken out, next comes the â€œliving later money.â€ The â€œliving later moneyâ€ is directly invested in the Thrift Savings Plan, individual retirement account and savings for a rainy day. There is not really the option of skipping a month because I want a new 60î€° flat screen. The resulting money goes into the checking account and can be spent frivolously and without consequence because everything I need to live on now and later has never reached my pocket and is therefore safe and sound.
Is this a plan for everyone? Of course not. Is it a good place to start if you donâ€™t have a plan? I think so. It has worked for me and would probably have worked for 78 percent of NFL players.