If it’s March in Indiana, odds are you’re watching March Madness.
It’s no secret this state loves their basketball teams. Even though Butler, Notre Dame, and Purdue didn’t win their conference in the regular season, March Madness still gave them a chance to be the 2017 NCAA Champion. That’s because the NCAA Division Men’s Basketball Tournament features 32 Division 1 conference champions and 36 most deserving teams who are chosen by the Selection Committee based on their record, ranking, strength of schedule, and many other factors.
So, what does any of this have to do with finance?
Well, when we look closer we see a lot of similarities. Mainly, they both have an offense and defense.
In sports, the “offense” puts points on the board.
In finance, the “offense” puts dollars in the bank.
In sports, the “defense” tries to keep the other team from scoring.
In finance, the “defense” tries to keep the team (household) from overspending.
Being skilled at offense and defense, and knowing the rules of the game, is what gives you the winning edge. It’s no different with your finances. You can’t have one without the other. It’s a team effort. In fact, sometimes it’s the defense that wins the game for the team.
Another similarity are the many obstacles we face when playing the game. While I was perusing the web for March Madness, I saw key words like, “coming up from behind, struggling, upsets, drama, injury, mistakes, surprises, winning streaks, losing streaks”. These are all experiences we can relate to. Sometimes things are going our way, and other times not so much, but you keep playing no matter what. If you fall down, get up! It’s how you bounce back that matters.
I recently read an article by Cameron Anderson, a Sophomore at Duke University, who said even though Duke won the ACC tournament by winning four games in four nights, he thinks they won’t win the tournament because of their defense. He said, “they can’t be matched in terms of talent and offensive firepower, but that’s not the case on defense and that 14 of the last 15 NCAA champions have ranked in the top 15 in defensive efficiency – Duke is 39th”.
I bring this up to point out how the defense is important. In finance the person in charge of defense is the person in charge of the budget. This job is not nearly as glamorous as offense and it’s a lot tougher than we give people credit for. But it’s only through a strong defense that it’s possible for a No.16 seed to beat a No.1 seed.
If you’re a natural budgeter with creative and productive budgeting ideas, my hats off to you. It truly is a talent. Here is a link to our cash flow analysis available for anyone needing more assistance in their defensive strategy.
So, what does your financial bracket look like?
- Written by Gail Gill, CFP®, Worley Erhart-Graves Financial Advisors