Imagine if your job paid you almost $2 million a year. You’d be set for life, right? Maybe not…
That seems to be the fear of a lot of players on the Washington Redskins squad. While the average player in the NFL makes $2 million annually, players on this team have a fierce tradition of living on less than they make.
Read more: 10 tips to become debt free in 2016
Frugality on the football field
According to a Wall Street Journal article, there is a culture of thrift and trying to outdo each other when it comes to cheapness on the Redskins squad. The players must know that 80% of athletes go bankrupt within two years of the end of their playing days! That’s because it’s all too common for professional athletes to live large and then when checks stop, they’re in trouble.
Economists talk about ‘marginal propensity to consume,’ an economic theory that says as income rises, spending rises in tandem. So if you’re not saving anything at all during your highest-earning years, that’s a recipe for disaster when the money stops coming in.
I was in an appliance store and I was looking at appliances and the costs on them. You can buy really nice fridge for $700 or you can buy a really fancy one for several thousand dollars. What’s the difference between them? A few thousand dollars! They both chill and freeze the same. Likewise, I recently bought a washer/dryer pair on sale for $698 with free delivery and free setup. They’re great machines, but they look ugly. No stainless steel look here. But what do I care? They’re going to wash dirty clothes!
But back to the Redskins. Running back Alfred Morris makes $1.5 million a year and drives a 1991 Mazda 626. Pass rusher Ryan Kerrigan signed a five-year $57.5 million contract. But he shares a basic apartment with a roommate. Quarterback Kirk Cousins drives a 2000 Savana passenger van. ‘It’s better to buy appreciating assets than depreciating,’ he tells the Wall Street Journal. ‘No yachts, no sports cars.’ There’s person after person on this team that is frugal.
It may sound silly to you that they make so much money, yet choose to live like this. But there’s a lot of wisdom to running counter to the predominant culture of how we spend our money here in America!
The next time you get a raise at work, how about saving it? Or saving half of it? If you come into a big windfall, why not blow 5% to 10% on something frivolous and then save the rest?
Just something to think about!
For more money-saving advice, see our Money section.