I grew up in rural Kentucky the oldest of four children to young parents. I started working when I was ten years old by cleaning houses. I later worked my way through college earning two degrees. I remember those early days very well, and like every mom, I wanted something better for my own kids. I knew the key would be teaching them financial responsibility at home.
I want to be clear: I am not a financial planner. I do, however, have a business degree and have spent many years managing profit and loss (P&L) for large companies. In my own family, I have taken a very common-sense approach to guiding my children with their finances, especially my son Jordan, whose NFL career has presented its own unique financial opportunities and challenges.
Jordan has been in the NFL for five years. He now owns his home outright – without a mortgage, and he has no debt. You may be thinking, “Sure, that’s easy! Those NFL players rake in millions of dollars.” But that’s not always the case. According to a Sports Illustrated report, about 78 percent of NFL players go bankrupt or suffer financial hardship within two years of leaving the game. While the NFL disputes that figure, the fact is that many young players do not know how to manage sudden windfalls from large, but potentially short-lived, paychecks. I did not want my son to be among those statistics.
It’s not difficult to see why many professional athletes get into financial trouble. The perceived flashy lifestyle of professional players often becomes a case of keeping up with the Joneses. Many of the highest paid athletes also compete off the field, buying new cars, big houses, jewelry and so on, but the reality is much different for other players. For those at the bottom of the earning ranks, money can be tight, and many live paycheck to paycheck.
The fact that Jordan is on sound financial footing is no accident. We accomplished this by focusing on three principles – giving, saving and spending. Giving is a pretty simple concept; our family tithes to our church. Saving is more complex and means saving for the future and life after football. This requires having a disciplined plan. Spending is about taking care of needs (food, shelter and clothing) while living within your means. Being financially responsible requires knowing the difference between wants and needs. You want a fancy sports car, but you need transportation. Needs have nothing to do with what others have.
There was one more important element to this financial plan, but it came with rules. Jordan was encouraged to enjoy the fruits of his labor by rewarding himself with something that would remind him of his success, BUT he had to be able to pay for it in cash without creating any hardship. In other words, splurge if you can afford to, but do it responsibly.
While it’s important that we approached our financial budgeting with a well thought-out plan, having these conversations long before draft day helped establish a solid foundation. It’s never too late to start talking about smart financial planning. Mothers are the centers of many athletes’ lives, and encouraging them to pave the path toward a secure financial future is one of the most important influences we can have.