The screech of the tires.
The scream of the engine.
The roar of the crowd.
F1 has seen a massive increase in popularity in the past couple years, especially with the introduction of the Netlfix series Drive to Survive. In fact, in the US, the audience has nearly doubled since the show premiered. But is there any way we can relate Formula 1 to Financial Literacy Month? You bet your Bottas we can.
So let’s take a deep dive into five drivers to see how we can use their 2022 season to learn some useful lessons about your money.
Charles Leclerc: Bad Strategy
It’s no secret that Ferrari has made some… interesting strategy choices this year.
While Leclerc has the skill to be battling for first, there are many times when one bad strategy call has taken him out of the race for the podium. In the world of personal finance, this is somewhat similar to the get-rich-quick scams that you can find online. There are many scams that promise easy money, but leave you in debt once the whole thing is over. Some examples of these scams are:
- Work from home scams that promise a lot of money for little work
- Crypto currency/NFT scams
- Mystery shopping scams
- Fake job listing scams
Even if you have a good financial plan, falling victim to a scam can undo all the hard work that you’ve done to get to that point. Carleton has resources to help if you have questions about whether or not something is legitimate or a scam. The Student Affairs office have a list of common types of scams and tips on protecting yourself from scams.
Nicholas Latifi: Set Goals
To say the 2022 season hasn’t been kind to Latifi would be putting it mildly.
But just because you’re in 21st place in a 20 driver championship doesn’t mean you shouldn’t have goals. For Latifi, that goal was to keep racing and try to eventually score his first points of the season. And on Sunday October 9 he finally achieved a P9, getting him his first points of the season.
Latifi is a good example of what can happen when you set a goal for yourself. Setting short and long-term goals when you’re doing a budget is a great way to help you stay on track with your savings goals. It’s much easier to save money when it’s designated for something specific (i.e. travel, a new car, a new computer) rather than having a generic savings account. You can even rename your savings accounts on your online banking so that you’re always reminded of why you’re setting that money aside.
Lewis Hamilton: Keep Pushing
Lewis Hamilton has a saying this year after every one of his races: let’s keep pushing.
And while Sir Lewis Hamilton hasn’t won first place yet this year, that doesn’t stop him and his team from learning from their previous races in an attempt to improve the next time. This is the same mindset that you should have when it comes to your budget. Budgeting is tricky, and it’s unlikely that you’ll get it right on your first try. But that’s ok! Don’t give up if your budget doesn’t work right away, keep pushing and making small adjustments until you find a budget that’s right for you. Try adjusting your budget according to your values so that you spend more money on stuff that brings you joy. Or do what Homer Simpson did when adjusting his own budget by thinking of small ways to save money:
@macin1445 Homer Simpson Budgeting Style #homersimpson #simpsons #costofliving #funny #foryou ♬ original sound – Alex
Daniel Ricciardo: Emergencies
Is it too soon to talk about how Daniel Ricciardo was dropped from McLaren? Despite my personal feelings about one of the most charismatic drivers on the circuit (and how McLaren did him dirty), his situation does provide a perfect example of one of the most important things when managing your money: Having an emergency fund.
You never know when an emergency can happen. Whether that’s suddenly needing a new laptop or textbook (or getting dropped when under contract, I’m looking at you McLaren…) it’s important to have some money set aside to help you deal with these unexpected situations. Although it’s not as exciting as saving up for something fun, an emergency fund makes up for it by alleviating stress during a tough time. Even as a student you can start saving small amounts of money by:
- Setting up automatic transfers from your chequing to your savings account
- Adding the Roundup feature on your debit card, which rounds up your purchases to the nearest dollar and deposits the spare change into your savings account
- Paying yourself first if you have a part-time job by moving some money into your savings every payday
Max Verstappen: Good strategy
Honestly, Verstappen and Horner are just the worst. So instead I’m going to focus on Red Bull strategist Hannah Schmitz. Unlike Ferrari, Hannah shows what’s possible when you have a really good strategy in place. This is why it’s important to go back to the basics when it comes to your money, because sometimes we can forget the little things that can help us in a monumental way. There are two small things that you can do to help make sure you have a good strategy in place when it comes to your money:
Create/Review your budget
The Awards Office has a budget calculator to help you get started, or you can use an excel spreadsheet or a pen and paper. If you already have a budget, it’s a good idea to review how well you maintained your budget over the past month.
Track your spending
Although it doesn’t seem like it has much of an effect, tracking every single purchase that you make is an effective way to not only reduce your spending, but also to help see where your money is going every month.
By using these small tips as part of your overall financial picture, you’ll be on track to be the Hannah Schmitz of personal finance!