7 Ways You Can ‘Moneyball’ Your Financial Life
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Andrew Lisa
Edited by
Levi Leidy
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When Brad Pitt’s character in the movie “Moneyball” was trying to convince a washed-up catcher that he would have no problem transitioning to first base, he asked his chief scout to reassure the skeptical player that his new position is “not that hard.”
The scout’s response?
“It’s incredibly hard.”
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The same could be said about saving, budgeting, investing and keeping your finances in good order. But just like in the movie — a true story about a low-payroll baseball GM who had to get creative to compete with the league’s fat cats — you’re not working with the budget you want. You’re working with the budget you have.
It’s mid-October, which means two things — the weather is cooling down and the MLB playoffs are heating up. As the World Series draws near, it’s time to apply the lessons learned from one of history’s greatest baseball movies to your real-life finances.
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Keep Track of Every Dollar
Pitt’s character — legendary Oakland A’s GM Billy Beane — began every negotiation by knowing exactly how much money he could spend. You’d be wise to do the same.
“Most people know what they make but are completely unaware of what they spend,” said Aviva Pinto, managing director at Wealthspire. “Besides credit cards, trips to the ATM, sending cash via Venmo and Zelle and the use of Uber, Lyft — it all adds up. The best way to learn to streamline finances is to keep track of spending, keep a budget and do a financial plan to see where you are, where you are going and how you are going to get there.”
Find Out: How To Set a Realistic Budget You Can Live With
But Never Pay Top Dollar
In the movie, Pitt’s character spends a whole lot of time on the phone wheeling and dealing until he gets the best possible offer for every player he trades — another lesson that transcends baseball.
“For your phone and cable bill, you really need to review your plan every couple of months to see if you’re using all the features you’re paying for,” said Mark Chen, founder and CEO of BillSmart. “Having a channel or two extra could be costing you $50 a month. For your credit card debt, it’s a little-known secret that you can get a lower APR on your card by negotiating a better deal with your bank. Americans can lower their APR by 5% or more on average, which is $500 of savings a year on $10,000 of debt.”
Pick Winners
Pitt’s character was a master of narrowing down the selections and honing in on the one player who would get the absolute most bang for his team’s buck. In your life, you’d be well served to buy the highest-quality stuff you can afford so you only have to buy it once.
“We are in an era of fast fashion and mass-produced household items,” said Nathan Liao, founder of CMA Exam Academy. “Even though this means that many products are now much cheaper than they were before, they are not of the best quality. If you are always buying cheap, lower-quality clothes and other items, they may tear or break easily and you may have to buy replacement items on a regular basis. On the other hand, higher quality products will last much longer, preventing you from having to replace them. Constantly replacing items can really hurt your monthly budget.”
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Eliminate Waste
With the A’s shoestring budget, Pitt’s character had to be fanatical about using every dollar wisely — you should, too.
“To get the most out of your money, make sure you know where it’s going,” said Becky Blake, a millennial money expert, financial coach, award-winning personal finance podcaster and founder of TwentyFree. “Check your credit card statements for recurring subscription services that you don’t really enjoy or use.”
Jake Hill, CEO of DebtHammer, makes a monthly budget that includes every cost — even if it’s a $10 subscription service — to spot even the slightest frivolous spending.
“By tracking every single cost each month, I am reminded of every service I pay for, and sometimes I realize that I’m not really using that service,” Hill said. “This simple process ensures I’m not wasting money on unnecessary bills each month while getting the most bang for my buck for the services I keep.”
Liao, too, offered some waste-preventing tips, including:
- Avoid bank and credit card fees
- Choose bike- and scooter-sharing programs for local travels instead of Uber and Lyft
- Choose family sized items
- Order meals for pick-up rather than delivery
- Don’t keep subscriptions to publications you no longer read
- Stop ordering groceries to be delivered rather than going to the store
- Don’t spend extra just to get free shipping
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Invest In Sure Things
Big-market, big-money clubs like the Yankees and Red Sox could afford to gamble on exciting players who were surrounded by question marks. Billy Beane and the A’s could not — and neither can you.
“Stay away from volatile investments,” said Julie Ramhold, consumer analyst with shopping comparison site DealNews. “Plenty of people jumped on board the GameStop bandwagon when stock prices started to climb, but most were aware they weren’t going to make their fortune that way. Skip these moves that are getting a lot of attention in the news and focus on steadier investments instead.”
Surround Yourself With Good People
Pitt’s character relied on the insight of the sabermetrics wonk who devised his controversial player-selection system, played by Jonah Hill. You need good people in your corner, too.
“Whether you are a first-time investor or looking for new energy in your current strategy, we suggest investors work with a fiduciary or a chartered financial consultant (CHFC) to develop a financial plan that outlines their goals and how to work toward achieving them,” said Katy Ufferman, a chartered financial consultant with Maxwell Financial Management. “Financial independence starts with a plan, which should be the basis that every investor relies on when trying to make the most of any financial investment.”
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Stick With the Plan No Matter What
Billy Beane had people telling him he was crazy at every turn — but he never wavered. When you come up with a plan you believe in, stick with it.
“Stay the course,” Ramhold said. “It can be tempting at the first sign of a dip to sell off your investments, but many experts advise against doing just that. Whatever the market is doing, give it time to right itself rather than panicking and selling off right away.”
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