When you achieve more success on the court, you may earn more prize money and other income. That’s a good thing! Earning more money is a sign that it’s time to put your money to work with a solid saving and investing plan. Your goal should be to set yourself up for financial success—and have a backup plan in case of injury, a drop in performance or other unforeseen events that may have an impact on your earnings.
Creating a budget may seem like a lot of work, but if you think of it as a “spending plan,” it can be an empowering way to make the most of your income. Best of all, creating your spending plan takes just a few simple steps.
1. Calculate your average monthly income
Your prize money will likely depend on the tournament you’re in and which round you reach, so it may be difficult to estimate your earnings before competing. Instead, add up your earnings over the past year and look for patterns, including months where income may have increased or decreased. You can review your year-end prize money summary on the WTA PlayerZone, and include any additional income you may have earned, including sponsorships, endorsements or other income sources.
Divide the total amount for the year by 12 to better understand how much you can spend each month. If you want to be especially cautious, consider working with the amount from one of your low-earning months and use that as your monthly income for the purposes of budgeting.
2. List your fixed expenses
A “fixed expense” is a recurring expense that does not change much from month to month. This may include:
- Rent or mortgage
- Mobile phone
- Insurance premiums
- Coaching costs
- Gym membership
- Car payment
Create a list of your personal fixed expenses and how much they cost per month. Consider including monthly savings as a fixed expense, so you can develop the habit of paying yourself first every month. Your savings goal can be a minimum amount or a percentage of your income, so you save more when you earn more. As a pro athlete, you set and attain goals daily, so use the same discipline in your finances to see the results in your financial plan.
3. Estimage your variable expenses
A “variable expense” may not occur on a regular basis, or the price may change depending on where you are. This can include your meals, airfare, hotel costs, gifts or vacations. Consider reviewing several months of your credit card bills or bank statements to calculate how much you typically spend in each category. Even though these costs can change, it’s important to add these items to your spending plan so you can plan for the cost.