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11th October 2019

Three lessons football can teach you about money

The beautiful game can teach us many important life lessons. From negotiating life’s difficulties and keeping your chin held high, to learning how to be a good team player and maintain self-discipline.
Learn to manage your finances by watching the beautiful game.

We can learn a lot about living our best life from understanding the intricacies of football, and this is never more the case than with matters of money. Giving you the perfect excuse (not that you need it) to continue avidly watching football matches! So, continue reading to learn three of the most important lessons which football can teach you about personal financial management.

1. Strategy is key

Football is often messy, passionate and sometimes even chaotic! However, underneath all of that bluff and bravado is a game of strategy and intelligence. In fact, game intelligence is one of the best measures of a player’s ability to make sound judgments on the pitch and act on them quickly. A player that chooses to play cleanly and minimise energy outlay in the early stages can maximise results by conserving energy for later in a match when it might be more needed.

Even players who don’t come off as particularly strategic are part of a larger unit, which is guided by strict coaching and tactical gameplaying. Players rely on their coach and coaching team to research the best possible strategies for playing against certain opponents, but they also make use of their managers and coaches to help them improve their own performance over time.

What has this got to do with money?

Developing a strategy for your finances is essential if you want to maximise your savings and get the most out of your money long into the future. Football is a fantastic example of how long-term planning and strategy can lead to success. In the same way that football teams prepare many seasons in advance and alter their tactics depending on their opponents: you should be doing the same with your finances.

There is no one-fits-all solution when it comes to looking after your money. It depends on your earnings, savings, family situation, inheritance, health and your own long-term financial goals. However, there are some general tips for effective strategic planning of your finances - no matter what state your finances are currently in.

What should your strategy include?

Budgeting

As every football club owner and manager knows, the first step to success (and having healthy finances) is to create a budget. Once you have some idea of your annual and monthly ingoings/outgoings; you are ideally placed to develop a solid plan of action for the near future. A budget is essentially a laundry list of where you get your money from and where your money goes each month. It is also a useful tool in working out what you can afford to spend on ‘extras’ once you have taken care of the essentials.

Not only is it an easy to create a budget using a computer application such as Excel, but it will also help you to visualise where you spend your money; making it easier to see where you can make savings. Often, we don’t even realise that we are spending money on unnecessary things, such as gym memberships that we long-since stopped using and monthly standing orders or direct debits for TV streaming services that we no longer watch. Finding out that you are spending over £25+ on coffee per week, for instance, might make you want to start making your own coffee at home and putting it in a travel mug to take to work. Cutting back on buying lunch out and making up good old-fashioned lunchboxes for days when you will be out for a long time, will also help you save money which can either be saved for a rainy day or spent on things that you really enjoy!

Build credit

Planning for your future is an incredibly important aspect of organising your finances, but if you have never had any kind of debt, it is tempting to think that this is the way it should remain. However, you might find that when you come to buy a house or get a car loan – you get turned down by the bank. This is probably because you have no credit score! Remember, banks and other money lenders only want to loan finance if they are sure they will get it back! If you have no history of borrowing, you are less trustworthy from a bank’s perspective. Don’t let this deter you though: building credit is not difficult and can be done in a relatively short space of time. You just have to engage in a bit of strategic planning! Using a reputable credit-builder such as Creditspring will help you to build credit in no time, since they don’t charge interest, just a simple fee. Membership loan schemes are an excellent way to reliably build credit, with none of the financial cost ordinary loans with interest would inflict on your wallet.

2. Things go wrong – but that’s okay!

As a 20-year-old, the Colombian footballer Carlos Bacca of Villareal fame was working as a part-time bus driver and fisherman! It is incredible to believe that in a world where talented young footballers are picked-up by a team or supported by a football organisation as teenagers, that Bacca managed to make his dream of playing for his country into a reality despite not having any financial support. His hard work, determination and perseverance through adversity paid off, but it certainly wasn’t an easy journey!

Football is full of inspirational rags-to-riches stories of (normally) young men triumphing in the face of hardship. In fact, the most cumulatively expensive player in the history of the sport, Angel di Maria, grew up in extreme poverty and as a child even worked in a coal mine alongside his family.

Why things go wrong financially?

Sometimes financial problems occur through no fault of your own, e.g. you get ill and cannot work or a company you invested in goes into administration. Sometimes they happen because you make a mistake, e.g. you get sucked into marketing campaigns for the latest model of a car (that you don’t need). Whatever the reason for things going wrong, you can always count on the fact that at some point, things will go wrong! This is why strategy is so important, as it can help minimise the adverse effects of a financial disaster.

What to do in the event of a problem?

Rainy-day fund

Setting up a rainy-day fund for when things go wrong is one of the first things you should do when you start to sort out your finances. Putting a small amount of money every month, into a separate bank or savings account will help you prepare for those unforeseeable events. Whether your boiler breaks down or your car fails its MOT – having a chunk of cash available will make the experience less stressful. It will also create less stress in the long term, even if nothing goes wrong, as you will have peace of mind that if something terrible happens, you won’t be left in a quandary!

Make smarter decisions (zero-interest loans)

If you end up stuck in an unenviable financial situation and you have no savings or rainy-day fund to fall back on, then your only option might be to take out a loan. Make sure that you stay away from loan sharks or predatory lenders who might try and lure you in with promises of immediate cash (without credit checks). Not only will you be subject to insanely high-interest fees but you will normally be expected to pay it back within a short timeframe or face the debt collectors knocking on your door.

Creditspring membership loans are a simple way to avoid complicated interest fees, instead you pay a fixed membership fee. This way, you always know where you stand and how much the loans will cost. Plus, having two loans available on demand, increases the habit of self-discipline and reduces the risk of borrowing expensive credit when you need it most.

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Make smarter investments

Prevention is as good as a cure. So, in order to prevent future crises from occurring, you will need to minimise the financial risks you are exposed to. Obviously, if you are investing money in high-risk stocks and shares, you know that the value of your investment can go down as well as up. But try to ensure that you include a diverse selection of organisations and companies in your portfolio rather than choosing only high-risk, high-reward investments which could leave you with less than you invested in the first place.

3. It’s the long term that matters

Football is full of stories showing that it is perseverance during the long term that counts. While saving money and living frugally can be difficult in the short term, over a period of years and decades, you will reap the rewards. Championship League clubs that languish for years with poor results, such as Stoke City FC, can suddenly hit the jackpot (i.e. the Premier League) when the years of hard work pay off. Players that haven’t scored a goal all season can unexpectedly score several in the last match of the season! When managing your money, the compromises and sacrifices you make now can have major positive effects on you and your family in the years to come. So, take a lesson for football and start investing in your future!

Choosing to save the money you would spend on expensive, foreign holidays might lead to you being able to pay off the mortgage faster, which could also result in you having more ‘free money’ once the house is paid off so that you can go on fancy holidays. Putting money into your pension pot might mean you get to buy a few less frivolous items each month, but when you retire, you will be glad you did. Playing the long game can be easy if you know how!

How do I play the long game?

High-interest savings

High street interest rates are pretty abysmal. You will be lucky to get over 0.5% interest on an ordinary, everyday saver with zero restrictions. However, there are ways of getting your cash to work harder, but only if you are prepared to lock your money away for a certain amount of time. There are many fixed-contract savings accounts and ISAs which offer significant interest-rates, but these often come with strings attached, e.g. you can’t access the account for five years.

Alternatively, there are also monthly savings accounts which allow you to deposit a fixed amount each month (usually up to a certain amount), e.g. £250 monthly. This is a good option if you need access to your money in the event of a crisis, as you will normally be able to take money out, although this typically means you won’t be able to put that money back in. Many high street banks offer up to 5% interest-rates on monthly savings accounts, which make them extremely popular. One of the major downsides to the high-rate interest savers is that they usually only last for a year, but if you don’t mind moving your money around each year to take advantage of the latest deals, then you will be able to get high-interest rates for years to come.

Pensions

Building up your pension pot is the most obvious way to invest in your future. Planning for retirement might seem unnecessary if you are no way near retirement age, but you risk not having enough to live on as a pensioner if you don’t start thinking about it early enough.

There are many options to choose from when it comes to deciding how best to develop your retirement fund. You can take out a private pension plan to top-up your company and state pension, or you can invest money in bonds or stocks & shares if you don’t mind the risk which comes along with it. If you are self-employed, it is especially important to make sure that you are paying the correct national insurance contributions. You may also need to invest in a private pension to ensure that you are not left out of pocket.