Financial Lessons from Olympic Volleyball Gold Medalist Kerri Walsh Jennings
August 06, 2012“We can do better” was the phrase I heard in an athlete’s interview. Surprisingly, the words came out of the mouth of three time Olympic volleyball player and two time gold medalist, Kerri Walsh Jennings. Kerri and her partner, Misty May-Treanor, have never even lost one set in two Olympics games – Athens in 2004 and Bejing in 2008 – and they are working toward their third in London. So when I heard the phrase from Kerri, I wondered, how can you do better than never losing a match? How can you do better than gold? How can you do better than being the best in the world?
Kerri wasn’t comparing her game to the competition. What Kerri was doing was analyzing every move she and her teammate made and figuring out how to improve. She is comparing herself to a standard of perfection – the perfect game. Since no one is perfect and no game is perfect, there is always room for improvement, even from the best in the world. This attitude got her to be the very best in the world and we can certainly learn from her – not necessarily to play volleyball, of course, though my game is pretty dismal – but to improve our finances. Here are some ways to adapt her winning philosophy by asking yourself how you can do better in the following areas:
I can do better in:
Saving money. Find ways to cut expenses in your budget. Look to recurring expenses such as your cable, cell phone, landline, utility, and Internet bills, etc. Call your insurance company and find out if you have the best price you can get for the right coverage. Drop the gym membership if you don’t go. (We just “froze” our gym membership until November since we are hiking and biking all summer.) Clean out your storage locker. Track your spending with online resources such as mint.com or vodlee.com. Then save the difference in your emergency fund or invest more for your future.
Eliminating debt. Stop using your credit cards. Pay extra on the credit card with the highest interest rate. Refinance your mortgage to get today’s rock bottom interest rates. Make extra payments to your principal to pay your house off early. Use this calculator to see what a difference it would make.
Lowering investment fees. Find even lower fees than you have now. Annual investment fees on your mutual funds in your 401(k) and IRAs, or any investment for that matter, drag down returns. According to Kiplinger Magazine, low-cost funds beat high-cost funds for every year and every data point tested. Looks for funds with the lowest expense ratios – the average mutual fund has annual expenses of 1.4% but some of the lowest expense funds such as index funds or exchange traded funds are less than 0.25%.
Choosing my investments. Many people set up their 401(k) account their first week of work or they simply go with the default choice, which may not be the best for your risk tolerance. Go through a risk tolerance profile and review your sample asset allocation based on your time frame and risk tolerance. Then review your current allocation to see if they match up. If not, make adjustments. Those investors who are investing too conservatively could end up needing to save more or work a few years longer. Those who are too aggressive may end up moving out of the market at the wrong time because they were in the wrong funds in the first place.
Reducing taxes. Everyone needs to pay their fair share of taxes but no more than that. Comb through your W-2, your tax return, and your piles of receipts to find deductions and credits. Do you have a hobby you can turn into a business? Are you eligible for a Roth IRA? Are you taking full advantage of your charitable deductions? Is your college student or live at home adult child counting themselves as a dependent on their tax return by mistake? Dig a little deeper into your tax situation to see where you can do better (For ideas — click here.)
Maximizing your company benefits. Are you capturing the full company match in your 401(k)? Are you funding your Health Savings Account or Flexible Spending Account to save 25% on prescriptions or other out-of-pocket medical expenses? Do you take advantage of tuition reimbursement to further your education? What about some lesser known benefits such as estate planning documents like a will or powers of attorney, transportation reimbursements, personal counseling from your EAP, or financial education (like this blog!)? Companies pay up to 30% for company benefits over and above employee salaries – research them and take advantage of them. Your company is paying for them.
When we compare ourselves to the standard of financial perfection, most of us can find plenty of ways to improve. It doesn’t mean that we don’t celebrate our successes along the way. This philosophy helps us by first of all keeping us humble and also keeping it real. There is always room for improvement but it doesn’t diminish our accomplishments. Kerri’s gold medal is no way tarnished by the fact that she can still improve – the opposite is true. If we toast our success and at the same time know that there is always room to do better, then we can actually….do better.