One of the challenges of coaching youth basketball is
getting everyone to work together. Some
kids are better than others, some kids are more aggressive, and some kids
inherently understand the nuances of the game better. The better kids sometimes don’t trust their
teammates to catch the ball or to make a basket. And you end up playing 3 on 5, and that’s no
way to win a game.
Basketball, in my opinion, is more of a team sport than many
other sports. Even the players who aren’t
as good still have an important role.
Defense, rebounding, setting a screen, or whatever. And when ALL of the players don’t do their
job, the team suffers.
What does this have to do with personal finance?
We don’t often think about personal finance in terms of
winning or losing, but achieving our goals – saving for a vacation or a
carefree retirement, or simply having piece of mind about money - I would
certainly classify as winning. No one
wants to reduce their goals.
As consumers, we often put things in silos – savings, debt,
investments, insurance, etc. For
anything that is an expense, such as loans or insurance, of course most people
look for the lowest rate or cost.
But are the pieces working together?
Decisions in one area can unknowingly have an impact on
other area. For example, when people go
to buy a car and get a loan, how often do people think about the impact on
their retirement savings? Or insurance –
and I don’t mean auto.
Most people have a fixed amount of money to work with each
month – just like I could only have 5 players on the court at any given
time. Not having all of the pieces work
together hurts us financially over the long term just as you would never play 3
against 5 in a game. Everything – and
everybody – has a role in helping to win.
When was the last time you thought about the following?
- How can life insurance help you buy that new car?
- How can you manage your debt to add to your retirement savings?
- How can you be your own bank so you don’t have to borrow from someone else?
- What are you doing to protect your most valuable asset?
- What do taxes have to do with college expenses and how can you get the IRS to pay for the tuition?
Answer to last week’s trivia questions: D – 57%.
Yes that’s right. A majority of
people polled expect to retire early and still collect their full Social
Security payment. Regardless of whether
or not you think Social Security will be there in the future, taking payments
earlier than the “full” retirement age gets you less money.
This week’s trivia question:
According to the 2007 Federal Reserve Survey of Consumer Finances (the
latest version), what percentage of people rely primarily upon friends and
family for financial advice. Is it?
A – 5%
B – 25%
C – 45%
D – 75%
