How the Tour de France relates to your finances.
Ah… summers in the French alps. The gentle mountain breezes blowing through the scenic countryside, and the unforgettable smell of sweat and Lycra from the hardcore cyclists of Le Tour de France. It’s no doubt the most wonderful part of the year to cycling fans.
As a Certified Financial Planner, financial coach, and a cyclist, I have always admired the dedication these athletes give to their sport. I’m a sucker for plans and routines! But... these riders must work together with their teammates to not only manage their personal bicycles, but to develop a winning race strategy through 21 days and 2,200 miles.
Learning to create and follow a plan is also key in managing your finances. Furthermore, learning to communicate and work together is essential to financial planning as a family.
How riding a bike relates to your money
In my personal opinion, there are so many fun things about riding a bike. The freedom to go out and enjoy nature, the wind blowing against your cheeks as you pedal, as well as the thrill of going downhill fast enough to get a speeding ticket in a school zone. Riding a bike can be exhilarating!
In some ways it’s similar to getting your first job, and having your “own” money. For the most part, you alone are now responsible for your hard earned money. You have the freedom to enjoy it anyway you see fit. Much like riding a bicycle, you may feel the rush of endorphins as you purchase everything your heart desires!
But… if you're not careful and properly prepared you can find yourself stuck on the side of the road with a flat tire and no way to fix it. One of the first lessons in both cycling and money is to prepare for emergencies. Whether it’s a bike bag with equipment for a flat tire, or an emergency savings fund, being prepared will no doubt pay off someday.
How cycling corresponds to your financial plan
We know the importance of being prepared for emergencies, but we can also relate cycling to planning your finances! Chances are you won’t wake up one day and decide you are going to fly to France to join Le Tour de France, especially if you are a leisure cyclist. To accomplish this goal you would need to develop an intense training plan over the course of many years. After all, if you have watched any of the television coverage, you would no doubt see the massive hills that the cyclists must traverse. I’m personally exhausted just watching from the couch!
In the same respect, waking up one day and deciding you are ready to retire may or may not be the best decision depending on your financial situation. Retirement means that you will need a steady cash flow to replace your current income. If you have not planned in advance, your guess is as good as mine where that money will come from and there is a good chance that social security more than likely will not completely cover your needs.
Creating a financial plan is essential to being able to retire someday. By creating a detailed plan you are putting your money to work in building your future. Retirement is not the only goal for your plan! Along the way you will have shorter term goals like purchasing a new car or house, or maybe an awesome vacation to watch or compete in Le Tour de France. So your plan will create many buckets to save for various financial goals.
How managing your family finances is like riding a bicycle built for two.
Riding a bicycle generally takes a small amount of communication. Occasionally you will need to inform others that you are turning, slowing down, passing on the left, or coming to a halt. Communication is important so others are aware of your actions, and you can avoid being injured.
The riders of Le Tour de France often ride in large groups called pelotons. They are close enough to each other that one wrong move could potentially bring down the majority of the riders in the group. It’s a scary thing to watch, and even scarier when you are involved in the crash. (Trust me on this one, human bones don’t play well with concrete).
Managing your finances as a family also takes communication and planning. Just like the peloton, you must work together to reach goals as a family. You may be great at climbing mountains or managing your money, but others in your family may struggle with the same task or concept.
I like to think of managing the family finances as riding a bicycle built for two. This is a specially designed bike that allows two or more riders on the same bicycle frame. It has multiple handlebars, seats and sets of pedals. Riders must work in unison to achieve any type of forward progression.
Communication is key and you must trust your partner. Learning to work together isn’t an easy task, and it will no doubt take a lot of someone saying “left foot.. right foot” to begin. After a while working together becomes second nature, as long as your goals remain the same. Riding a bicycle for two will not work if the person in front wants to go to the left, while the person behind wants to turn around. Poor communication could cause a lot of tension, a crash, or one person could end up doing all the pedaling work.
Kids should also be included in the financial cycling adventure!
I’m going to take this moment to introduce you to my daughter. She loves riding her bike and it seems to be her reason for being. My husband and I have tried to spend time teaching her how to be a proper cyclist. However, true to her nature she just wants to go fast and “race”. I’m sure you can imagine how nerve racking it can be having to sprint after an adorably fast 2.5 year old. My daughter’s second favorite thing to do is brake. Imagine our family on a bicycle built for four (I’m sure our dog would like to ride along). We will still need to work as a family to move forward, and our daughter will need to understand that she can’t sprint while the rest of us are slowing down, or brake while we are trying to speed up!
Most psychologists will argue that this stage of her life begins the most impressionable time period, and learning to follow the “rules of the road” should start now. As a Financial Planner, I can tell you that this is also the time that you should also begin talking about money. In fact, I just had a webinar in which we talked about Helping Your Kids to Make Cents of Money. (Click on the link to find the replay)
I’m a huge proponent of normalizing conversations around money. Learning to be comfortable around the topic and how to handle money should be taught at a young age. You will likely not want to start with discussing advanced topics like net worth, or debt to income ratios. Basic financial topics like budgeting, and saving for the future can be a good starting point. Try including young children in conversations about saving and planning family vacations.
- Learning the value of a dollar will help set financial expectations when planning for college. Students may realize the benefits of choosing a more reasonably priced college versus a college that may leave them with a large amount of student loan debt after graduation.
- Learning where money comes from can be a financial life saver! It can help your student skip the credit card offers that will be thrown around campus. Most of us know from experience how quickly balances can rise if you are not financially savvy!
Managing finances and riding the Tour de France are huge mental challenges.
I vividly remember the first time I was on a bike as an adult. I turned onto a street and suddenly saw a monster. The hill in front of me seemed to go up at a 90 degree angle. I was anxious that I would get halfway up the hill and suddenly the bike would start rolling backwards, because of the grade of the hill. I laugh now because I know that it was not logical, and I made it up the hill with more huffing and puffing than I care to admit. Over time, the more I climbed the hill the stronger I got mentally, and physically. I can assure you that cycling up the Alps takes a lot of mental stamina.
Money comes easy to some people, and to others it’s a concept that is harder to grasp. Saving for the future might be a priority to you, while your spouse or significant other may struggle with day to day finances. It is important that you can communicate effectively with others about money and financial goals. From time to time we all struggle with financial decisions and balancing our needs with our wants. It’s important to be mentally prepared to make financial sacrifices when needed.
How to begin your personal Tour de Finance!
If you are not a fan of cycling, don’t be discouraged! It’s still possible to create a plan to train for your personal Tour de Finance! Depending on the goals you set, the scenery could be just as breathtaking, and the hills equally as challenging as riding through the Alps.
I like to suggest you stop and take a current personal mental inventory.
- Where are you now?
- What financial skills do you have?
- What are your goals?
- What are your family’s financial goals?
- How easily do you communicate about money?
- What financial habits have you taught family members? (both conscientiously and unconscientiously)
These questions might seem strange to answer, given that most financial professionals are more likely to ask about your monetary assets. However I have found over the last 15 years as a Certified Financial Planner that retirement and financial goals are just as important mentally as they are monetarily.
After you become mentally ready to handle the challenge, it’s time to take inventory of your finances. Where are you now in relation to what you would like in the future? You can create a plan on your own, or hire a financial professional to help you build a plan for your financial future.
As a Certified Financial Planner, I help families to create comprehensive financial plans that balance “wants” and “needs” on the road to retirement. I work with families to help set realistic expectations, and manage emotions. Call, email me, or schedule an appointment online and let's work together to create a plan for your financial future.
Until next time...this is Melissa Making Cents!
Melissa Anne Cox CERTIFIED FINANCIAL PLANNER™ is also a College Planning and Student Loan Advisor, and Financial Coach in Dallas, Texas.