Money lessons we can take from the Super Bowl LVIII
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Millions gather around the TV, sports bars and stadiums leading up to the Super Bowl each year. The day off is often full of excitement, food, probably a little yelling, and even a potential Taylor Swift sighting this year! But amidst the cheers and halftime shows, there are a few lessons we can take to another arena: personal finance. While touchdowns and tackles dominate the game, here are a few lessons we can take from our favorite game every year to translate into money wins!
Here are five savvy money moves you can make inspired by this year's Super Bowl festivities!
Financial lessons we can take from the Super Bowl
1. Avoid unpredictable bets
While betting on your favorite team might seem thrilling, it's often a gamble wrapped up in emotions and very unpredictable outcomes. People who are less familiar with investing might say the same thing, but in the long run, the stock market becomes much more predictable than your favorite game of the year!
Consider the S&P 500, a popular stock market index, which has consistently delivered annualized returns of at least 7% over any 30-year period in U.S. stock market history. Since it’s inception, it’s returns have averaged 9.81% annually.
You can easily invest in a fund that tracks the same index, for example, Vanguard's VFIAX or VOO Exchange Traded Fund (ETF). Just as quarterbacks trust reliable receivers, you can lower your risk by investing in a pre-diversified investment with a history of strong performance. By investing wisely, you can build a winning financial strategy that lasts long after the final whistle blows!
Instead of putting your money on the line in a game of chance, consider investing in something more reliable. By putting your money in the market rather than on the field, you can start to build wealth steadily over time.
Still planning to place a bet on your favorite team? Then make sure it fits within your budget and consider it entertainment, not a finance play!
2. Prepare for an unexpected turnover
In football, an unexpected turnover or interception can quickly change the course of the game. Similarly, unexpected expenses or financial surprises can derail your finances if you're not prepared. That's why building an emergency fund is crucial — not just to cover that particular expense, but to avoid a much worse situation by going into debt. Think of it like your favorite player avoiding an injury that could have benched him for the entire season! Having a stash of cash set aside for unforeseen circumstances can provide peace of mind and financial security, allowing you to weather any financial storm that comes your way.
3. Take advantage of every minute
Just as players spend every minute trying to score points on the field, you can also use time to play toward your position when investing or paying down debt. Thanks to compound interest, time works in your favor when you're investing and works against you when you're paying off debt (especially high-interest debt, like a credit card).
Whether you're investing aggressively to try and retire early, or working on paying down a credit card or student loans, remember: every minute and every dollar counts! By prioritizing extra payments on your debt using strategies like the avalanche method, or investing sooner than later to take advantage of compound growth, making use of the time you have on the clock can have a drastic impact on your score at the end of the game!
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4. Don’t forget to celebrate at halftime!
Just like you’re still rooting for your favorite team at halftime, don’t forget to celebrate your financial progress along the way! One of the major benefits of setting specific financial goals that include a dollar amount and timeline is you know exactly when you’re 25%, 50%, or 75% of the way there to celebrate! Just like we all look forward to the musical artist that snags the Halftime Show, don’t forget to celebrate your progress and maybe treat yourself to a little something as you move closer to your goals!
Another lesson we can take from Halftime? That there’s always time for the game to turn around in the second half! If you’ve had a financial setback or maybe aren’t progressing as quickly toward a goal as you’d like, stick to the playbook and trust that there’s still plenty of opportunity left to make some strides.
5. Don't forget your playbook!
Just like coaches who plan their game strategies, it's essential to have a game plan regarding your finances. Defining your financial goals and creating a budget to help you reach them (all that preparation!) can truly make a difference in how you play the money game. Not sure where to start? Check out my Financial Goals Workshop or Quick Budget Course to develop a game plan. By allocating your money wisely and strategically, you can ensure you're making the most of the resources to win the money game!
6. Aim high for the endzone!
Just as quarterbacks aim for the endzone to score a touchdown, you can aim high with your savings by utilizing a high-yield savings account. The accounts, usually (but not always) offered by online banks and platforms can get you up to 400-500x the average amount of interest than a standard savings account, allowing your money to grow faster over time. By aiming high and taking advantage of higher returns on your savings, you can make strides toward achieving your long-term financial goals. Want a challenge? For every goal your team scores today, transfer an extra $10 to your savings goal, or open a high-yield savings account using one of my favorite providers: Get up to 5.5% APY using Wealthfront or up to 4.6% APY using SoFi.
The Key Play
While the Super Bowl is full of celebration and excitement, there are often many things that happen in the course of the game that surprise us! Much like our finances from time to time. By avoiding unpredictable bets, building an emergency fund, and taking advantage of what seems like small opportunities in time or money, you can help set yourself up for a win off the field too! So as you enjoy the game and festivities, don't forget to make some winning moves with your money.
