Personal finance , lessons from baseball
It has become a tradition for baseball fans and players to look forward to spring training. It’s a sign of hope that comes with fresh start that the new season will bring regardless of how they performed last year. As the new season gets underway, it’s a good opportunity to take and evaluate your finances from a baseball perspective.
It’s prudent to proceed one base at a time
Seeing the homerun light up on the scoreboard is such an amazing feeling however it’s good to note that games are won through a series of base hits facilitated by singles and doubles which get runners in a scoring positon. This approach of one base at a time can easily be applied to one’s financial journey. You need to identify what are the financial goals, what are the incomes and expenditures. Are you putting some money aside for retirement regularly? Understanding that the small steps are the building blocks for the greater success of the bigger goal is important. A good financial plan that outlines this small steps like amount of monthly savings will definitely be a good guide.
Cover your bases
To minimize the chance that a runner will reach the base safely, the baseball player stands close to the base to protect it. Financially it wise to be prepared for the unexpected. Having some savings for emergency will help bolster your resilience when bad time comes calling. This will prevent you from dipping into other savings like retirement funds or using expensive financing options like credit cards. Setting up insurance is also a great idea as it helps in times of emergencies such as health, disability and property.
Strike out swinging or strike out looking
Players understand that striking out is an integral part of the baseball game though most fans may not appreciate this. Actually it’s more common to strike out that to get hits. Ty Cobb holds the record for the highest batting average record of .366. Waiting for the right pitch in baseball is sometimes the best action for the player
Every baseball player understands the importance of having the right gear for the game. For batters, the difference in a good hit might depend on the grip of the players hand on the baseball bat. Understanding the factors that account for the best batting gloves will definitely increase the player’s odds. Financially lack of knowledge of the different financial products can go against achieving your goal. You need to understand the interest rates, insurance charges and other hidden charges when taking a loan for instance.
The first step in ensuring financial freedom is to have to first accept that indeed you are in a problematic state and commit to getting out of debt. You should be able to understand why it is important for you to get be financially sound. This is because the emotional commitment will allow for much needed discipline in sticking to the new way of life. Changing a lifestyle which seems comfortable for the benefit of the greater future is not easy. This requires sacrifices like cutting down on the lavish spending and this will definitely bring about some pain. You shouldn’t build a plan which is almost impossible to commit. A visual reminder can enhance this pursuit as it can help in the motivation. If you are saving towards a house, then go a step further and even get the picture of your goal. Put it even in your wallet to remind you whenever you are about to spend on.
List all your debts, balances, interest rates and minimum payment.
You need to have an accurate picture of how much you owe. Most people really don’t have a grasp of how much they are in debt till when they are far along. To know how long it will take to get out of debt you need to know how much the total amount is. List all the debts from the biggest to the smallest and tally the minimum payments so as to understand how much needs to be put up for paying the credit cards. Keep a tracker of this list and find joy when you reach a particular milestone.
Track down your spending
After making the initial resolve to pay up the debt, the next step is also crucial. You need to know what income you have and how its all spend. This will allow one to easily free up some of the money and aid in the repayments. Cut down on heavy spending and if possible reduce the monthly recurrent expenditure.
For substantial gain , look for big expenditures that are not aligned to your long term goals. Spending 300$ a month at Chipotle or Panera for work lunch is a big hit on your monthly income. Track down the wasteful recurrent expenditure. For instance the gym membership that you hardly attend. Possibly be practical and pay for per session. Also instead of buying expensive liqueur you can subtitue for something cheap or even learn how to make your own mix. This will significantly reduce your wastage.
Come up with a reasonable budget.
Tally down all the income received per month and try to match to the expenses. Draft up the monthy income from the annual income. Come up with a monthly budget and if the necessary expenditure is more than 50% of the net income then it will be difficult to repay the debt in a faster way. This might prompt for further adjustments.
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