It was spectacular. The crowd went wild when they saw Robin Van Persie leap into the air for his gravity-defying header against Spain – a play he calls “the best goal of my career.” And rightfully so; it was truly remarkable. Scoring that goal has solidified Hollands’ Van Persie’s reputation as one of the world’s greatest soccer players, earning him the title ‘The Flying Dutchman.’
But those astonishing plays are the exception, not the rule; teams can’t rely on them to win games. At the end of the day, good defensive soccer moves are equally important as jaw-dropping goals, although they’re often given less attention. If you want to win, stopping opponents at midfield may not bring in the glory, but it’s a vital component of the game. It’s great to score five goals, but you still lose if they score six goals against you.
The same is true in the game of personal finances. Just like in soccer, if you want to succeed, you need a good defensive strategy. It’s nice to bring in the big bucks, but if the money leaves your bank account faster than it comes in, at the end of the day, you will lose the game. Increasing debt always causes a financial mess, no matter how many offensive points you score along the way. As I always say, “A good income doesn’t always lead to a good outcome.”
All too often we get caught up in the grandeur of landing a high-paying job or scoring those big sales.
And who can blame us? Having a successful career can put us in the limelight, make us more popular and even boost our self-esteem.
Defensive strategies, such as saving thousands of dollars by taking public transit to work, or brownbagging lunch, are not as culturally popular as scoring a big paycheque. We have to change our mindset and really internalize that a win is a win and that a dollar saved is a dollar earned.
If you’re puzzled as to why your debt keeps piling up despite your good income, it’s time to develop a good defensive strategy: a budget. You need a game plan that will enable you to guard your net: To payoff debt and save for retirement, as well as for those unexpected expenses that creep up from the far side of the field.
Following are a few game-day tactics that will help position you for success:
1. View your expenses as your opponent
Just like in soccer, it’s essential that you know your opponent. In this case, it’s your expenses. Analyze your opponent’s “moves.” Start by breaking down your fixed and semi-fixed expenses over the last 12 months – your mortgage, property taxes, RRSP contributions, utility bills, etc. In today’s online world, this process won’t take long at all; in fact, a client recently told me they did it in less than an hour.
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