FINANCES
HOW QUICK MONEY GOES.
STEVE SMITH ISN'T SURPRISED THAT SOME PLAYERS ARE BROKE
Athletes from the nation's three biggest and most profitable leagues—the NBA, NFL and Major League Baseball—are suffering from a financial pandemic. Although salaries have risen steadily during the last three decades, reports from a host of sources (athletes, players' associations, agents and financial advisers) indicate that:
*By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.
*Within five years of retirement, an estimated 60% of former NBA players are broke.
Plenty of NFL players burn through plenty of money, plenty of times in a given year. Panthers receiver Steve Smith isn’t surprised by this dynamic, and he has a few ideas as to why it happens.
“Mismanagement of money doesn’t change because you have a lot of money, there are a lot of guys out there that make a lot of money and that make a little money and still live paycheck to paycheck,” Smith told WFNZ in Charlotte on Wednesday. “You know, ignorance of how the financial game works or managing money doesn’t exclude you because you have a lot of it, it just enables you to make bigger and dumber mistakes because you have a lot of money.”
IT'S EASY TO MAKE A BUDGET PLAN
If the first step of a strong financial plan is to create a budget, then the first step of creating a budget should be starting an account with Mint. Mint gives you a complete set of award-winning personal budget planner tools. And it’s all available online 24/7 in one convenient place.
It’s easy to stick with it.
Mint has helpful charts, graphs, and alerts that make sticking to a budget even simpler. View all your transactions grouped by specific category, so you can track your finances and manage your budget -– plus get important alerts via email or text message.
It’s easy to maintain.
Since Mint automatically updates all your accounts every night, you never need to import data. Mint tracks all your spending activities daily -- even from multiple bank and credit card accounts.
https://www.mint.com/
IT'S EASY TO MAKE A BUDGET PLAN
1. Use credit cards sparingly
Use credit cards wisely because this is a chance to establish a solid credit history. Watch the interest rates. Don't be suckered by low introductory rates. Expect the interest rate, or annual percentage rate (APR), to climb above 20 percent in three to six months. Don't use the card for routine living expenses or a night on the town.
2. Pay credit card balances in full
Remember: Credit is a loan -- and it doesn't come from The Bank of Dad. That means any balance on the credit card must be repaid. Get a card with a low limit. Shop around for the best deal and read the fine print before signing up. If you move, inform the bank of your new address. Guard your credit card number and close unused accounts.
3. Get the best checking account deal
Shop around before opening a checking account. Smaller banks may offer a better deal. Compare fees. Ask if there's a fee for dealing with a teller, including deposits or withdrawals. Ask if there's a fee to use a debit card. Ask about ATM fees. Ask if overdraft protection is part of the student package. If not, ask about linking such coverage to a bank-issued credit card.
4. Start saving
Open a savings account. Establish a savings plan and kick in a little money each week. Stick with it. Compound interest is a wonderful thing and it's always wise to have a little extra tucked away.
5. Keep track of your spending
Use cash whenever possible because counting out the bills underscores the connection between the purchased item and money leaving your wallet. Use a debit card before a credit card for the same reason. Keep track of spending because a budget means nothing without accurate accounting.
6. Set a limit on entertainment
Mad money should be sane and sober. Set a limit for walking-around money and stick to it. Hitting up the ATM for another fistful of crisp twenties is easy -- and guaranteed to deplete your bank account.
7. Shop wisely
Remember this Yankee adage: Use it up, wear it out, make do or do without. If you learn to say no to that fancy stereo, ski trip or new set of duds, you'll be ahead of the pack.
8. Keep an eye out for free money
Apply for the PELL GRANT. This requires digging and persistence. See what's available. Don't be bashful. If you have a shot, apply. If it's a long shot, how can you go wrong for the price of a stamp?
9. Walk or take public transportation
Leave the car at home. The insurance, maintenance and gas will eat you alive. Most university towns are compact and everything you need will be within walking distance of campus. If some of your friends have a car, great -- let them cover the expense.
10. Avoid unnecessary expenses
Avoid unnecessary expenses at all costs. Parking fines are a tax on stupidity or laziness. Read the signs and follow the rules. This goes for little things like returning library books or videos. Pay your bills on time or you'll get stuck with a late fee.
11. Look for student discounts
Clip coupons. Many businesses give students discounts in an effort to establish a relationship that will continue when they enter the real world and start earning a paycheck. Take advantage of the perks. Be on the lookout for deals on plane tickets, pizza, books, clothes -- everything. The student newspaper is a good place to start. The Internet can be a gold mine of discounts.
12. Don't eat out all the time
Pack a lunch. This will save you big bucks. Don't eat regularly at fast-food restaurants because it will reduce your bank account while bloating your belly. At the supermarket, buy the house brand and increase your savings. Never shop on an empty stomach.
© 2011 Forbes.com
