For many people, the offside rule is the most confusing part of soccer. The concept seems difficult and it can be tough to track in real time but overall most soccer people understand the concept. The problem is that in the heat of the moment, our vision gets skewed by emotion. I recall distinctly saying to a group of my players at the college level, “By the way that you complain, we must never be offside.” The comment wasn’t lost on them and they became more discerning about whether or not they were being honest with themselves about the calls being made. Being able to see the objective truth, rather than our preferred truth is extremely important in a lot of areas, especially finance!
The idea of financial offside is a simple one that most people should see as blatantly obvious. Yet much like the players that I mentioned above, we tend to get blinded by our emotions in many situations. The simple version of financial offside is “don’t spend money that you don’t have!” Again! Like the offside rule, there are caveats to this pretty basic concept. Things like mortgages and other loans are “money that you don’t have” but are often necessary in many instances. The financial offside rule is more about those unnecessary purchases that are made out of desire and not necessity. The “shiny objects” that are going to fill an emotional hole for a moment but most likely will not fill a practical need. If you have unlimited means, absolutely buy to your heart’s content. However, if you’re like most people, you probably need to be aware of the invisible moving line of your finances. It moves on a daily, weekly and yearly basis. The line is drawn at the last dollar that you have liquid in your possession. Credit blurs the line slightly. So being aware of whether, you’re over the line, approaching the line or completely onside is something that you should know. Don’t make the assumption that my players did! You’re not always onside, just because it’s you! Your emotional justification of the reasons why you’ve crossed over have nothing to do with the cold hard fact. When you’ve spent more than you have, you’re creating problems for yourself!
So here are two simple ideas that can actually help to keep you “onside” in your finances. They are similar to ideas that work in soccer.
- Wait! – Lots of unnecessary purchases are made out of the emotion of the moment. Let the moment pass. If you practice this strategy on a regular basis, it will become easier. Delaying a purchase until you’ve considered the financial impact will protect you from poor purchases.
- Pay attention – You need to regularly check in on your finances. They are not one of those friends that you don’t see for years and just pick up where you left off. Depending on who you are, the check in may need to be as often as daily. Being afraid to face the truth is no excuse and once you know the truth, planning is easier.
Finances are a scary concept for a lot of people. Just like the offside rule, they can seem difficult but I’m trying to help fix that issue. Later in the summer, my co-author and I will be releasing a book that explains finances using soccer as a metaphor. Financial offside is such a simple concept that it’s not included in the book but I figured I’d put the idea out there as a bit of a “teaser”.