Maximising financial wellbeing

SAVE BEFORE YOU SPEND - SOUNDS SIMPLE RIGHT?

With professional sports becoming more lucrative, it can be easy for industry professionals to spend their earnings in the moment and forget about the long term. This raises the question of what is the most efficient way to manage one’s finances, in order to maximise financial wellbeing during and after their playing career.

Author: Jean-Pierre Stone, Financial Planner at FLM

Money is a topic that is not always talked about at home, nor is it taught enough at schools. Unfortunately, this leaves a financial literacy gap that is filled through trial and error. It is also difficult to find the time throughout our lives to understand how we can best manage our money.

Arguably, there is an even bigger financial literacy gap within the sporting world as most athlete’s spend all their time training to be the best in their specific sport. Once their careers stop, the world of finance can be an overwhelming and steep learning curve.

FLM have been on a mission to change the way people think about money, particularly in the sporting world. Through various financial workshops, we drum home a message that your wealth is not dictated by how much you earn, instead it is how you behave with your money that can shape your financial future for the better. Simplifying financial jargon, the aim of our money education programme is to help athletes increase their financial knowledge and give them practical steps on how they can begin to install good financial habits that if implemented consistently, could lead to a better financial future.

Most people know that they should save some money for later life, but not everyone does. This comes down to a person’s financial habits and also their financial literacy.

The current economy has inflation at an all-time high at 9 per cent. High inflation means an increase in the cost of living. You will be able to buy less of some things with the same amount of money than you did before.

What will make a difference is how much your overall cost of living changes compared to changes in your income. If prices go up but your income stays the same as it was a year ago, you’ll notice it won’t go as far as it did then.

It therefore becomes increasingly more important that we understand how we can get our money working harder. It is difficult for some to understand that there is a way for you to make money without trading your time. Once you understand the power of investing and compound interest, it becomes very difficult to spend your money on things that do not generate a return on capital.

This is not to say that we all need to stop spending money on things that we enjoy, but if you can find a balance then you could have much more flexibility in later life. The easiest practical way to start installing good financial habits is to monitor your income and expenses. There are several great apps out there, but a simple pen and paper can do the job. Each month, go through the following: • What is my essential expenditure (Mortgage, rent, food etc)? • How much would I like for my discretionary expenditure (Eating out, hobbies etc)? • How much is remaining?

Whatever amount is remaining after your expenses is what you can invest to try and grow your money. This is where help from a professional comes into play as most people want to try and grow their money but without taking unnecessary risk.

If there is no income remaining after your expenses, there you either need to review your discretionary expenditure as you may be having too much of a good time…or find a way to increase your income

To take things to the next level, set up a monthly direct debit into an investment vehicle no matter how small. This way, you are paying your future self before you can spend the money! Ideally you want to be treating this as part of your essential expenditure and your most important bill.

Most people spend before they save whereas those that are financially

literate tend to save before they spend. This is a big psychological shift that is needed that will give us the best chance in getting ahead.

Everyone is in a different financial position and there are many other factors that need to be considered, which is why speaking to a professional money coach is important. Even the smallest financial changes can have a great impact on your overall financial future and the best time to start will always be 10 years ago. The next best time to start is today.

FLM is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the FInancial Conduct Authority) for the purpose of advising solely on the Groups wealth management products and services, more details of which are set out on the Group's websiite www.sjp.co.uk/prodcts. The title 'Partner Practice' is the marketing term used to describe St. James's Place representatives. FLM is a trading name of Financial Lifestyle Management Ltd which is registered in England and Wales, No. 04426632. Registered Office: 37 Warren Street, London, W1T 6AD. For more information visit www. flmltd.com

Inset: Wealth Management Education Workshop being delivered to QPR FC Academy.

“Once you understand the power of investing and compound interest, it becomes very difficult to spend your money on things that do not generate a return on capital.”

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