March Madness will culminate in Indianapolis this week! Coaches and athletes have worked diligently on their game plans to get to this Final Four tournament. Dedication and hard work also apply to your financial game plan. Are you prepared to win?
The teams coming to the Final Four did not achieve their goal by accident. They were disciplined and they worked hard EVERY DAY, even on mundane drills, to get this far. Can you say as much about your dedication and discipline with your financial game plan? Follow these Final Four tips to cut down your net to financial freedom.
#1 Set Up Your Game Plan and Review the Tape
Duke’s Coach K did not become the winningest coach in college basketball without proper preparation and setting goals for himself and his players. How are you going to reach your financial goals? Same answer - with proper preparation and goal setting. Write down your game plan. Review your goals periodically, just like players review the tape, so you know what works and where you fall short. Sure, you might dribble the ball off your foot, but learn from your mistakes and continue to implement your plan. Sometimes you just need to call a timeout and re-evaluate.#2 Go on the Offense, Play Good Defense
Michigan State won the game with their offensive strategy. If you want to retire like a champion, then you need to go on the offense and save for retirement. Your savings should be automatic, like shooting a free throw. Contribute dollars directly from your pay to your employer retirement plan, an IRA (or Roth IRA) and/or a brokerage account. This strategy will allow you to increase your savings without getting your shot blocked.Coaches often mention that defense wins games. You need to play good defense to keep a handle on your budget. One of the biggest detriments on the road to the financial hall of fame is out of control spending and debt accumulation. Review your spending habits and avoid credit card debt. If you can’t pay off that credit card, put on the full court press to create the turnover to better cash flow.
#3 Protect the Ball
Wisconsin is headed back to their second straight Final Four because they know how to protect the ball. One way to protect your financial well-being is to set aside cash to use in the event of an emergency. Review your checking account for the past several months and determine how much money you need if you get sidelined from your job. Your emergency account should contain sufficient funds to pay for three to six months of your living expenses. Maintain this rainy-day money in a separate savings account so you don’t spend the funds recklessly - that’s a personal foul.Protect those on your team by reviewing your life and disability insurance to ensure you have sufficient coverage. Review your property and casualty insurance policy for your home and auto. Look into the benefits of long-term care insurance and how a policy can protect you financially.
Think of your teammates and implement your estate planning documents. Those documents are like a playbook telling everyone their responsibilities and how you want your assets distributed. We never know when our run is going to end. So, to protect those you love, have your playbook together. Important estate documents include your Last Will and Testament, financial power of attorney, health care power of attorney, and living will. You should also review the beneficiary designation of all life insurance policies and retirement accounts.