The TSP Game Plan for Financial Success
As a soccer coach, I always remind my players that success on the field isn’t just about talent—it’s about discipline, teamwork, and sticking to the fundamentals. The same is true for managing your finances and investing in your future. Think of your financial journey as a soccer match: you need a solid game plan, consistent practice, and the patience to play the full 90 minutes. Most importantly, success comes from building and maintaining disciplined habits, both on the field and in your financial life.
For military personnel and government employees, the Thrift Savings Plan (TSP) is like your team’s star striker. It’s a powerful, reliable tool that can help you score big in the game of financial independence. But just like in soccer, you can’t rely on one player alone. You need to position yourself wisely, pass the ball (your money) with purpose, and take the right shots to achieve your goals.
In this guide, we’ll break down how to use the TSP effectively, drawing on simple strategies and soccer analogies to keep things fun, relatable, and easy to follow. With the right habits and a winning mindset, you’ll be well on your way to financial success. Let’s kick things off!
Rule #1: Spend Less Than You Earn (Play Defense First)
In soccer, a strong defense is the backbone of any championship team. You can’t win if you’re constantly letting the other team score, and the same goes for your finances. Playing defense in your financial life means spending less than you earn—it’s about protecting your goal and keeping control of the game.
Here’s the play: aim to spend no more than 70% of your income. This disciplined habit leaves you with 30% to invest in your TSP and other savings, giving you the resources to go on the offensive. Think of it like keeping the ball in your possession. You’re controlling the pace of the game, staying in command, and setting yourself up for a winning shot.
Just like a disciplined defense requires focus and consistency, managing your spending takes intentional effort. Build habits that help you track your expenses, cut unnecessary costs, and stick to your budget. With a solid defense, you’ll be ready to transition to offense and make the most of your financial opportunities.
Rule #2: Invest the Difference (Pass the Ball to Your Star Player)
In soccer, once your defense is solid, it’s time to shift gears and go on the attack. This is where the magic happens—where goals are scored, and games are won. In your financial life, the Thrift Savings Plan (TSP) is your star striker. It’s efficient, reliable, and built to deliver results. By investing the money you save, you’re passing the ball to your star player and setting yourself up for a winning shot.
The TSP offers low-cost index funds that allow your money to grow over time, and just like a well-coordinated team, each fund plays a specific role:
- C Fund (Common Stock Index Fund): The big forward, representing large U.S. companies. It’s your powerhouse, driving growth and scoring big goals.
- S Fund (Small-Cap Stock Index Fund): The agile winger, representing smaller U.S. companies. It’s quick, dynamic, and adds diversity to your attack.
- I Fund (International Stock Index Fund): The international midfielder, covering global markets. It expands your reach and ensures you’re playing on a global stage.
- G Fund (Government Securities): Your goalkeeper, providing stability and security. It’s there to protect your portfolio when the market gets rough.
The key to success here is discipline. Just like a soccer team practices passing drills to perfect their attack, you need to consistently invest the difference between what you earn and what you spend. Automate your contributions to the TSP so that every paycheck passes the ball to your star player without hesitation. Over time, this disciplined habit will allow compounding to take over, and you’ll see your financial goals turn into reality.
Remember, a great offense starts with a smart pass. Invest the difference, trust your team, and let the TSP lead you to victory.
Rule #3: Avoid Debt (Don’t Score an Own Goal)
In soccer, there’s no worse feeling than scoring an own goal; accidentally putting the ball in your own net. It’s a mistake that not only sets your team back but also gives your opponent the upper hand. In your financial life, debt is the equivalent of an own goal. It drains your resources, limits your options, and makes it harder to achieve your goals.
Debt, especially high-interest debt like credit cards or payday loans, works against you by eating away at your income. Instead of using your hard-earned money to invest in your future, you’re stuck paying interest to someone else. It’s like giving the other team possession of the ball and letting them control the game.
Here’s the play: before you start investing heavily, focus on paying off high-interest debt.
This is your first line of defense. Just like a soccer team clears the ball out of their defensive zone to avoid danger, you need to clear your financial field of debt. Start by tackling the highest-interest debts first (the ones costing you the most), and work your way down. This strategy, often called the debt avalanche method, ensures you’re minimizing the damage as quickly as possible.
Ensure you invest a minimum of 5% of your gross pay into your TSP account to capture the government match, even while you’re paying down your high interest rate debt. Once you’re debt-free, you can play offense with confidence. Imagine stepping onto the field knowing you’re not weighed down by mistakes from the past. Every dollar you save and invest in your TSP or other accounts will now work for you, not against you.
But here’s the key: stay disciplined. Avoid falling back into debt by building habits that keep you in control of your spending. Create a budget, automate your savings, and think twice before making purchases on credit. Remember, in soccer and in life, the best teams don’t just recover from mistakes. They learn from them and adjust their strategy to avoid repeating them.
By avoiding debt, you’re protecting your financial goal and setting yourself up for a winning game. Keep the ball out of your own net, and you’ll be ready to focus on scoring big in the game of financial independence.
Rule #4: Give It Time to Grow (Play the Full 90 Minutes)
In soccer, matches are won over the full 90 minutes; not in the first 10. It’s a game of endurance, strategy, and patience. The same principle applies to building wealth. Success doesn’t happen overnight, but with time, consistency, and disciplined habits, you can achieve financial victory. The Thrift Savings Plan (TSP) is your star player, and its magic lies in compounding;the process where your earnings generate even more earnings over time.
Think of compounding as your team’s fitness level. The longer you stay in the game, the stronger your position becomes. Just like a well-conditioned team gains an edge in the final minutes of a match, your investments grow exponentially the longer they’re allowed to work. Every dollar you invest in your TSP is like a player on the field; working tirelessly to move the ball closer to your financial goal.
But here’s the key: you have to stay in the game. Start investing early, even if it’s just a small amount, and stay consistent. Automate your contributions to ensure you’re always putting money into your TSP, no matter what life throws your way. This disciplined habit is like showing up to practice every day. It builds momentum and ensures you’re ready to perform when it matters most.
Now, let’s talk about overtime.Those extra minutes when the game gets tough and every decision counts. In your financial journey, overtime represents unexpected challenges: market downturns, economic uncertainty, or personal setbacks. This is where disciplined habits combined with compounding give your team the competitive edge. By sticking to your strategy and trusting the process, you’ll be prepared to outlast the competition and come out on top.
Remember, compounding isn’t just about growth; it’s about resilience. The longer you stay invested, the more your money works for you, and the less impact short-term setbacks will have. It’s like having a team that’s trained to play their best in the final minutes of the match, no matter how tough the opponent.
So, play the full 90 minutes and then some. Start early, stay consistent, and let time and compounding do the heavy lifting. With disciplined habits and a long-term mindset, you’ll be ready to score big, even when the game goes into overtime.
Want to see your timeline? Use Coach Holdren’s Simple Economic Model Calculator and plug in your numbers. Link: S.E.M. Calculator – Simpli-FI.money