Footballers are known for spending too much money. It seems very easy to avoid or solve this problem for a football player. However, when we look into detail we note that the problem is situated on different levels:
False feeling of (adequate) saving
Young footballers earn a lot of money. Even if every month they spend big on the latest mobile, a nice car, presents for the family, etc. at the end of the month they still manage to save (a lot) more than their entourage of family and friends. By spending so much every month and still being able to save, a false feeling of security is created. Particularly if one is able to save thousands of euros more than others, one gets this impression.
Why does this create a false feeling of security? Some footballers do not realize that after when they are 35 they will not have the same earnings anymore and that they need a very substantial amount of savings in order to be able to live without any income for the rest of their life. To maintain their existing standard of living from the age of 35 (pensionable age) to 85 (death), they need to have built up a far greater capital than they thought.
In other words, footballers underestimate the built up capital needed to maintain their standard of living after the age of 35. Saving a couple of thousands of euros more every month than their family, is usually not enough. The majority of footballers thinks an amount of 1 million € is more than enough to spend 10,000 € every month for the rest of their lives. This is a big misconception. A footballer who turns 35 today and wants to spend 10,000 € every month until the age of 85 needs roughly about 6 million € on his account (assuming it is not invested and there is no inflation). This is (a lot) more than footballers expect.
It is very difficult for a footballer to curb his spending. The majority of his colleagues doesn’t think in the long term and likes to spend. The newest cars on the club’s parking lot, the latest gadgets and the most exclusive trips, etc. create a (wrong) picture that there is enough money to burn. The others are doing it, so why not? This feeling is reinforced by the footballer’s entourage. A footballer’s entourage often expects a certain image and pattern of spending that belongs to his status as elite sportsman.
It is not easy for a football player to not give into this. Without being aware of it, one’s pattern of spending adjusts to the entourage’s expectations. After some time the perception is created that the level of spending is normal and justified. However, in most cases this is not the case. The built up capital, as already indicated, is probably not big enough for a carefree retirement.
In the changing rooms the wildest stories do the rounds about the most fantastic investments, exuberant salaries and the most exclusive parties. It requires a strong personality to not be curious about this and not take part. This is a very normal and human process.
Downsizing one’s standard of living
If you have been used to a particular standard of living for many years, you will want to maintain this standard of living. However, after time many realise their built up capital is not enough. At that moment it is very difficult for an ex-footballer (and anyone else for that matter) to downsize their standard of living.
It is much easier to maintain a slightly lower standard of living during your active career (but which is still very high) than to drastically downsize it when you hang up your boots. For most football players downsizing their standard of living after their career is a very painful experience. Not just for yourself but also for your entourage who have certain expectations in this field because the entourage expects the (ex-)footballer to maintain their (high) standard of living. This hinders the process to downsize one’s standard of living and psychologically it will not easy to accept. Footballers live in a world where perception and appearance play a key role. The public also has an outspoken opinion about the average footballer which means it is not straightforward to adjust the expectations as a function of one’s own needs.
Danger of substantial contract improvements
A top footballer’s salary may be subject to sudden substantial increases. A contract of 20,000 € net a month can easily go up to 100,000 € net a month following a transfer. Footballers may be tempted to spend substantially more as well. A new car, a bigger house, often a new watch, etc. At the end of the month you barely notice these extra expenses. The salary may have more than doubled which means, despite the increased expenses, about the same amount can still be saved. Again the pattern of spending increases and you are not aware of it. And the required capital when you retire has also become substantially greater.
For these reasons curbing one’s expenses is probably one of the biggest challenges for a footballer. Footballers want to live comfortably too though. You like to go to a restaurant, buy new clothes regularly and possibly go to an exclusive party once in a while. And it is not always fun to have to curb your expenses. Due to the pressure on and off the pitch, you want to enjoy yourself too of course. Often that costs money.
In our book The Bankrupt Footballer – 50 guidelines to take control over the business side of your football career, we explain in further detail the problem of overspending.