The point of spring training for baseball is so that players can shake the rust off after a long off-season, work on their fundamentals, and lets coaches evaluate what players will work best on the baseball team. I’ve written with the baseball analogy with respect to fantasy baseball before. If you follow the same process for real baseball and have a spring training for your money, you’ll be ready for opening day too. Just remember though, there’s actually no off-season for your finances!
- Pitchers and catchers report first – These are the first to report to spring training mainly because they will touch the ball more than all the other players combined. Take the most important part of your finances and money, and get them to report to spring training first. This could be any of the big areas, like the mortgage, managing your credit card debt, or a new job. Focus on the financial players on your team that touch the ball most often.
- Work on the basics – Players work on throwing, running, catching and hitting. Do the same, make sure your budgets are set, you’re saving by spending less than you earn, your emergency fund is set, you pay the bills on time, you avoid bank fees, and you have a plan.
- Mechanics of the swing over results of the at-bat – Remember to focus on having solid mechanics, and don’t focus overly on the results of any particular at-bat. For your money, this means having good processes and habits. If you always have a sold reason for making investments and a proven system that has worked well in the past, don’t worry about what happens the next time you buy an asset.
- The stats don’t count – During spring training, the stats don’t count. Try and set up a safe zone where you can work on the basics, try out new pitches, and not worry whether you’ll make the team or not. Lower the amount you’re trying things out with, start with minimums.
- Coaches try new lineups – Be like the coach, try out new players and new lineups. Will that new credit card with the $500 signup bonus work every day? Try it for 3 months. What about that online site to manage all your financial data? Give it a try. Try the tax software instead of the accountant. Need a new accountant because you’ve got questions on your rental properties.
- Are you going to retire from the game? – Just like players, some want to see if they could come back for another year or if they should retire. Maybe you want to give retirement a try, but you’re not sure? Try and arrange for a 3 month break. Plan activities that you would like to try in retirement. Set your expenses and income to what you would have in retirement. Can you hack it in retirement, or will you strike out?
Work on the basics, make sure your swing is in big-league shape, and try out some new lineups to see what works best for your team.
Readers, any ideas about how you get your finances in big-league shape? Are there any annual steps you take to make sure you’re on top of your game?
Karl Nygard is the original founder of Cult of Money and created the website to share his ideas on investing, personal finance, and more.