Financial Defense- Defense Wins Championships!

Financial Defense- Defense Wins Championships!

Sorry, I’m a sports guy, so let me put this in sports terms to start with. This may really appeal to you or someone you know! There is an old saying in sports that “Defense Wins Championships.” Simply put- if you don’t have a good financial defense, you won’t be able to win the chip.

At some point, offense may sputter and not produce. Example in basketball, you may have a great shooting team, but there may be a few games where your shots aren’t hitting, and if you can’t play defense you will lose easily.

Financial Defense wins championships
Financial Defense brings Wealth!

The objective in sports is to win the game by scoring more points than the opposing team. The same holds true in personal finance. At the end of each month you need to look at how much money you spent compared to the income you pulled in.

I like to use the term “Financial Defense” it refers to the things you can do to save money or limit your expenditures. While this is only one part of the equation, it is indeed an important one.

If you only made $1600/month but your expenses were $1000, you made $600/month. You won that game, you made $600. Compared to a big spender, they made $7000 that month but spent $7500, they lost! You made $600 while they lost $500.

Sounds simple so far, right? A great defense can help you win more games. The less you spend, the easier it is to win. Like sports, if you hold a team in football to just 3 points the whole game- you only need one touchdown to win. On the other hand, if you defense is suspect, you might give up 35 points and need 6 touchdowns to win.

If you read my intro, you will know that I don’t advocate for extremes. I am not advocating that you eat cat food, live in your parent’s basement, or never do anything that cost money. You can play defense well with a few main strategies that require a little discipline and some sacrifice.

Playing good financial defense is crucial for long term success, the same way it is in sports. Making a high income doing a skilled trade- what happens if that industry collapses? Technology replaces that skill? Global pandemic/prolonged recession? Can’t get hired due to age, etc.? Become disabled?

Many things can happen in life that are out of our control. However, every day we can play great defense. Every team is capable of playing great defense. Defense requires discipline, hard work, determination, and sometimes pure grit.

You can play great defense, even if your Financial defense is poor now. There is light at the end of the tunnel. Educate yourself, have patience, this is a long game, but a winnable one!

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