Many new professional athletes find themselves having access to a large amount of cash in a short period of time, which can be overwhelming. Without the right financial training and knowledge, some athletes find themselves deep into debt or completely broke within a few years. Whether you are rookie or a seasoned professional athlete, here are some tips to help you stay on the saddle financially.
Save for a Rainy Day
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Although you may have a large amount of money coming in on a monthly basis, it is important to start your own rainy day fund as soon as possible. It is recommended that professional athletes save at least 50% to 80% of their net income in a high-interest yielding saving account. By putting your money in this type of account, you will be saving and earning money at the same time. Remember this rainy day fund can come in handy especially if your career ends suddenly due to injury or an unexpected event.
Purchase Athlete Disability Insurance
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Due to the high risk of injuries, many professional athletes purchase disability insurance to protect their future earnings. Some insurance companies offer coverage up to $25 million per policy or up to 80% of your athletic contract. Since the terms and conditions of these policies will vary, you need to make sure you fully understand your policy before you purchase it. However, be prepared to pay higher premiums if you want maximum coverage.
Live Below Your Means
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Some athletes get caught up in the fame and glamour of being a professional athlete and overspend on big ticket items such as mansions, top-dollar cars, and designer clothing. In order to remain financially stable, you have to live below your means. You need to determine exactly how much you need to live comfortably without any extra expenses. So before you purchase two mansions along with six exotic cars, take some time to think about it.
Stick to a Cash-Only Budget
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Due to having a large income, it can be easy to qualify for multiple sources of credit such as credits cards, mortgages, and lines of credit. However, if you are not paying off your balances each month, you can find yourself deep into debt. In order to stay on track financially, try to purchase everything using cash only. If you find yourself running low on cash due to an emergency, you can also apply for a payday loan at paydaycity.net.
Seek Financial Expert Advice
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There are several licensed professionals that are trained to help you with your finances such as certified public accountants, tax attorneys, and financial advisors. So if you are not sure how to handle your finances, it is best to seek out expert advice. When looking for a financial expert, your family, friends, or other professional athletes can be great sources. Before you hire anyone, you should do your research and meet with them to discuss your financial goals.
Although you may feel that your professional athletic career will last forever, the key thing to remember is that no job has a lifetime guarantee. Therefore, it is important to stay financially stable for yourself, your family, and your future.
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