MARCH MONEY MADNESS by Kathryn Beach
M
arch is a month college basketball fans like myself wait for all year long. I love filling out my bracket with predictions for the NCAA Men’s Basketball Tournament, especially if it looks like the Tarheels have a chance to win it all! The fun continues throughout the month as the inevitable upsets come and I can celebrate the games I predicted correctly and lament the ones I didn’t. No one is likely to ever complete a perfect bracket – the odds of doing so are about 2.4 trillion to one. But paying attention to the relative strengths of different teams makes correct picks much more likely. That’s true in my day-to-day life of financial planning as well. Consider these factors that are equally important for basketball as well as personal finance.
Teamwork
Players have to get and stay in shape.
A team scoring eighty points per game still may not win if their defense isn’t up to par. The other team could score ninety without a strong defense to stop them. How can you protect the paint financially? Step one is to have an emergency fund. This is money that could tide you over if you lose your job or become temporarily disabled, or in retirement if the stock market were to take a dip. A general recommendation is to have three to six months’ worth of non-discretionary living expenses in this savings account. Another way to protect yourself financially is to have legal documents regarding your wishes in place. These would include an advance directive and healthcare power of attorney so you have a plan for your health care in the event of an accident or illness, and durable power of attorney appointing someone you trust to make financial decisions on your behalf in the event you aren’t able.
Freshman basketball players build up to their first season on a college team with months of workouts. Throughout the season, they continue strength and endurance training so they can run up and down the court for forty minutes without collapsing. Getting in shape financially takes time and commitment as well. Look at any outstanding debts you have and consider paying off high interest loans or credit cards quickly so you can save money on interest. Also, take a look at your spending to see where you might be able to cut back. You may find that you can reduce spending in areas that are less important to you so you can increase savings or spending in areas that line up better with your values. Put processes in place that keep you reliably focused on these goals. 12 | 50+ Living | March 2020
Even Michael Jordan wouldn’t have won NCAA and NBA championships without the rest of his team. A team works together best when they have respect for each other and good communication. This isn’t all that different from how families work. Take the time to have regular conversations about money with your family. You and your spouse can get on the same page about spending and financial goals in retirement. Conversations with your children about your finances will help prepare them so there are no surprises down the road.
Don’t forget about defense!
