Budgeting and the Olympics don’t often go together, especially since every modern Olympics has gone way over budget, but there are things we can apply to our financial lives from the past few weeks in Rio de Janeiro.
1. Focus on what you want to accomplish
What was amazing about winning the gold medal in the 400 meters and setting the world record wasn’t solely that South Africa’s Wayde van Niekirk was able to do it. It was that he did it from out front the whole way. No one had won a 400-meter world title from lane 8, probably because there is no feedback if you’re in lane 8. You’re basically running blind because you can’t see behind you and how the other racers are doing.
There are a couple principles that apply here. First, don’t worry about what other people spend their money on. Set your goals and accomplish what you want to do. Second, set your goal and go for it. You should know what pace you’re on to pay off debt or save money. Aim to hit your marks and do it.
2. Be wary of status symbols
Paying for status is always a big risk. You can’t sell it back. Its value is theoretical at best and if it does come in the form of something tangible it’s probably overpriced for your needs. While individuals aren’t in danger of paying billions to host the Olympics, buying that really fancy car, a gigantic house or anything else that denotes a certain status can lead to using money for something unnecessary that could be better used elsewhere.
3. If you can do it once, you can do it again and again
There are plenty of examples from the Olympics of athletes who have won gold medals previously and four, eight and even 12 years later continue to win gold medals. They are able to repeat whatever skills, talent or focus they have learned when it matters most.
At times, managing your daily finances seems hard to do. Unexpected costs keep us from putting as much into savings as we would like or we spend too much on a weekend out and have to scrimp the rest of the month. Learning the necessary behaviors to live within your means for a month is a skill you can use for the rest of your life. Once you end a month having lived within your means, it’s something you can replicate moving forward.
You can determine your monthly spending with confidence and know you can stick to it. You can change it to meet your needs and you’ll still be able to live within your means. Once you learn to discipline yourself and keep to a budget, you’ll be able to do it again and again.
4. Today is not Tomorrow
When Brazil was awarded the Olympic games its economy was breezing along. It hasn’t progressed like people thought it might and a recession affected Rio’s preparations for the Olympics. When we think our financial situation will improve no matter what, we lull ourselves into thinking it will take care of itself.
Planning on having more money available down the road depends on planning and saving to make sure you actually have that extra money available when the future arrives.
5. When it gets near the end, do anything necessary to pull it out
Shaunae Miller beat Allyson Felix by a torso for the 400-meter crown and in track it’s the torso that counts. The dive totally worked and just goes to show there’s always something more you can do to be successful.
The next time you’re reaching the end of the month and don’t have much money left, remember to dive for the finish line and stretch your money as far as it will go to come in under budget. Accomplishing your goal is always better than not.
6. Opportunity cost
With $13 billion slated to be spent to host the Olympics, that’s a lot of money for 19 days of athletic competition. Big ticket purchases in your life can be very necessary, but buying them may limit your other options. Don’t handcuff yourself. With its current economic state, Rio probably would have rather spent the money on other things like healthcare, education and the police force, than providing a spot for foreigners to compete for a few weeks.
Make sure your big ticket purchases are exactly what you need by giving yourself time to make the best decision possible, even if that means waiting 30 days.
7. Olympic athletes have to make it work too
Even elite athletes aren’t necessarily well-paid. In order to chase their dreams of an Olympic medal, some competitors make it to the Olympics on as little as $3,000 a year. The financial aspect is important to make that work, but setting a goal and determining what it takes to accomplish it is another important thing to keep in mind.
Set your goals and ambitions and use your budget to make them a possibility. Sacrificing in some way can help you achieve what you truly want in life.
8. Turning it around isn’t impossible
In the women’s 4×200 freestyle relay, the U.S. entered the final leg .084 seconds behind. Thanks to Katie Ledecky, they won by 1.84 seconds.
Just because you feel like you have a lot of debt, are underwater or are struggling to come up with money each month, doesn’t mean you can’t make a change. Try something new, ask for help or just get started putting your finances in order. By living within your means, paying off your debt and saving money, you’ll be preparing yourself to accomplish your financial goals.
If getting started seems daunting, Mvelopes can help with a free debt analysis that will provide you a plan to start paying off your debt and putting sound financial principles to work in your life.