Every March, millions of Americans get sucked into the craze of March Madness. Whether or not they've seen a college basketball game all season, there's something about building a bracket, tuning in to watch their teams play, and bragging rights when they anticipate a major upset that has so many people hooked.
Although the two have little in common, except that a bit of luck can make you rich (or broke), there are a few financial lessons that we all can learn from March Madness.
Create a Game Plan
Although they sometimes make it look effortless, each win is a product of hard work and a good game plan. The coaches and athletes spend hours watching game footage, studying their opponents, and running plays so that they're prepared for game time.
When it comes to financial management, you have to have a plan and put in the work to execute it. Plan how much you want to save and actually set that money aside. Research different financial institutions and investment opportunities and select the ones that work best for you. Practice financial restraint so that it becomes a habit and you can achieve your financial goals.
Good Coaching Matters
I know almost nothing about college basketball, but I fill out a bracket practically every year and typically do alright against my competitors. The reason being is that I do a lot of research.
I look up who the sports commentators and former coaches predict to win each round. I ask other friends and colleagues who watch a lot of basketball to give me their advice. I compare several different experts' predictions and typically create a bracket that is compromised of bits and pieces of all of them.
This model is great to rely on when creating your financial plan. If you're not super knowledgeable about financial management, rely on the experts. Sit down with a representative from your local credit union, a financial planner, or a friend/family member that is money savvy and ask for advice. Use the information you receive to create a financial plan and have knowledgeable people you trust review it.
Steer Clear of Emotion Driven Decisions
Like I said before, I don't typically watch a lot of college basketball. However, my Nana was a HUGE Duke Blue Devils fan. She would stay up all night watching them playing and cheering them on, and for a reserved southern lady like herself, she would whoop and holler. Because of her devotion to the Blue Devils, I would always add them into my bracket and sometimes rank them pretty high. Although at times it worked in my favor, other times it would screw up an entire leg of my bracket, preventing me from earning future points.
In the same way, you have to keep your finances clear of emotion-driven decisions. Don't let your LOVE of that cute top in the window of your favorite boutique or the SADNESS that overwhelms you when the commercial about the homeless kittens asking for donations control your financial decisions. Stick to your game plan (financial plan), and don't let your emotions cause you to change how you've decided to spend your money.
Regardless of your picks during the tournament, if you follow your game plan, listen to your coach, and make decisions free from emotion, you're on the right path to a win!