With a busy work schedule, two incredible kids (a.k.a. “the monsters”), research and writing obligations, there isn’t too much time in my life for golf these days. While daydreaming about hitting the golf links for what Mark Twain referred to as “a good walk spoiled,” it dawned on me that the game of golf has many parallels to managing our personal finances.
Goal setting
It is essential in golf (or any other important endeavor) to set realistic goals. I used to play regularly to a five handicap when I was a card carrying member of the “DINK” society (Dual Income No Kids). My goal during those days was generally to try and shoot in the 70’s – not pro material but not too shabby either. Now since I only play about five to six rounds a year, I am just trying to shoot in the mid- 80’s. Priorities change and I have adjusted my expectations to the reality that I shouldn’t expect to immediately return to my previous form.
This is also true with managing our personal finances. It is important to set “SMART” and realistic goals. This makes the financial part of our lives more relevant and is the first step on the path to success.
Practice, patience, and persistence
Perhaps the biggest similarity between the game of golf and our financial lives is the need for practice and effective routines. The best golfers develop their swing and mental toughness with a never-ending process of hitting balls on a range and they use strength and training programs to support their swing development. I realize that I will not get back to the good old days of golf anytime soon but over time and with some practice, it is a real possibility.
As our financial lives develop, we need to develop routines and discipline to help simplify how we manage our money too. From routine budgeting and paying ourselves first to automatic savings programs and debt reduction strategies, it is possible to simplify our financial lives by creating habits.
We might not always get things right the first time, but just like weekend golfers get an occasional “mulligan” from their buddies, we should all take advantage of a second chance to get our personal finances in order – no matter how far off the beaten path we may have ventured.
Tracking progress over time
Whenever I do decide to start taking my golf game seriously again, it will be important for me to track my scores and see how I am progressing over time. This will help with motivation and let me know when I need to adjust my training routine. Golfers can track their progress using a handicapping system or by simply saving old scorecards.
Proper tracking is required when taking financial life goals seriously too. Goals should never be set and forgotten. Here are some suggestions to track your financial progress:
- Track your net worth on an ongoing basis using a financial organizer.
- Review your investment portfolio and track how your investments are doing in comparison to appropriate benchmarks.
- Review your risk tolerance on a regular basis and as your life goals or circumstances change.
- Re-balance your investments on a regular basis.
- If you are working on paying off debt, make sure you are getting there the quickest way possible by using a DebtBlaster calculator.
- Check your credit history. Order a free copy of your credit reports every 12 months from annualcreditreport.com and use services such as creditkarma.com and freecreditscore.com.
Rewarding yourself
The game of golf can be frustrating to both beginners and veterans of the game. Whether the obstacles are lakes, creeks, sand, or my unorthodox swing, there are potential setbacks around every corner of the golf course. The best approach is to prepare for them and minimize their effects.
However, it does come with some rewards to make up for all the lost balls and broken clubs. It is a great way to get outside and enjoy exercising (especially if you decide to walk the course like I do), nature, the sound of the ball rattling around the bottom of the cup after a perfectly aligned putt, the camaraderie of spending time with friends after a round, or signing a card knowing you just reached a personal best.
The same is true with managing personal finances. Whether the potential obstacles are taxes, inflation, economic uncertainty, health care costs, or paying for my kid’s college education while balancing the need to save for retirement, there are ways to prepare for obstacles without letting them paralyze you with fear.
Long-term goals also take time to achieve and sometimes it helps to have a little reinforcement along the way so managing our personal finances should include some built-in rewards for progress. The next time you review your family’s personal spending plan (a.k.a. “budget”) or pay off a credit card balance in full, be sure to reward yourself a little.
Golf is similar to financial planning in that they both require goals, practice, patience, and persistence. Of course, they can also both be frustrating at times. But with the right attitude, consistent routines of good habits, and proper guidance from coaches, a path to success can be established.