A March Madness that is eminently sensible

Michelle Singletary
Columnist March 22, 2013

Part of the thrill of the NCAA college basketball tournament is filling out the brackets.

During March Madness, 68 teams vie for the championship. There are several rounds, during which the brackets get down to 32 teams, the Sweet 16, the Elite Eight and then the Final Four.

Michelle Singletary writes the nationally syndicated personal finance column, “The Color of Money.” View Archive

Playing off the excitement of the tournament, the National Endowment for Financial Education and the Financial Planning Association have created an interactive bracket of 32 financial goals that people can use to narrow down the most important money issues they want to address. To complete the bracket online, visit www.financialfour.org.

Just as with the NCAA tournament, there are four major divisions in this financial game:

●Saving and investing.

●Values, communication and advice.

●Protection and security.

●Spending.

“Identifying and managing priorities is the key to keeping your financial life in order,” said Ted Beck, president and CEO of NEFE.

Beck says that using the brackets takes “the madness out of ranking your fiscal responsibilities.”

I like the concept and the game. One of the things people often ask me when it comes to organizing their financial life is: “Where do I start?” There is so much to managing your money, it is hard to figure out what you need to concentrate on in the stressed-out lives many of us lead.

“Americans are increasingly responsible for an overwhelming amount of financial choices,” said Lauren M. Schadle, chief executive of the Financial Planning Association. “Our goal is to provide insight on what they should be thinking about when developing their financial plans.”

Let me walk you through the categories in this March Madness game. Under the saving and investing division are “emergency savings,” “use variety of tools,” “pay yourself first,” “save 10 percent,” “time value of money,” “differentiate goals,” “calculate retirement” and “use employer savings.” You’ll find an explanation when you click on each concept.

Under the values division are “tackle debt,” “experience change,” “financial terminology,” “keep up maintenance,” “family communication,” “identify personalities,” “tax time planning” and “financial check-up.”

In the protection and security bracket, you’ll find “adequate insurance,” “emergency kit,” “workplace benefits,” “protect documents,” “create a will,” “ensure job security,” “life insurance” and “pull credit report.”

Finally, in the spending division are “live within means,” “manage food costs,” “responsible credit,” “housing costs,” “understand income,” “track spending,” “service providers” and “spend wisely.”

As part of the fun, about 300 financial experts ranked their top financial priorities for Americans to focus on in 2013. Based on their picks, the National Endowment for Financial Education and the Financial Planning Association came up with a Final Four.

The winners?

●Live within your means. I agree that this should make it to the Final Four. Actually, I would retitle this “live below your means.” You only have a limited amount of money. To meet your goals, you have to reduce your expenses so that you get to keep some of what you make for savings.

●Protect yourself with adequate insurance. Thirty-nine percent of U.S. adults do not have life insurance, according to a survey released last year by InsuranceQuotes.com. If you put this in your winning bracket, don’t just focus on life insurance. Determine what other insurance you might need. For instance, if you rent, do you have renter’s insurance? Only 34 percent of renters have renter’s insurance, InsuranceQuotes found in another survey.

●Tackle debt. Stop promising yourself to get out of debt; instead, do it. I suggest you list your debts starting with the lowest balance and knock that debt off first. Getting rid of some debt quickly often motivates people to continue on their quest to be debt-free.

●Build an emergency savings account. If you live below your means, you’ll probably have the money to start an emergency fund. You tax refund is a great emergency starter amount. So far this year, the average refund is about $2,900.

My Final Four were “manage food costs” (our eating out has gotten crazy), “pull credit reports” (haven’t done that yet this year), “track spending” and “calculate retirement” (I’ve done this before, but I need to update some numbers because of the recent uptick in the stock market).

So, what would your Sweet 16 be? What about your Elite Eight financial goals or your Final Four picks?

Once you finish the bracket, you can go to www.smartaboutmoney.org , which is a program of the National Endowment for Financial Education. On the site, you can look for more information to meet your goals.

While you’re watching the basketball games or during breaks, fill out this bracket. You can’t lose.

Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or singletarym@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to postbusiness.com.

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