Manage Your Money Like a Basketball Bracket

Nobody likes the process of building a budget but since we have all been captivated by watching NCAA basketball during March I thought of a way to make the process more fun by turning the chore of budgeting into a game.

If you are a March Madness fan you probably still have brackets on your mind. How about using those same brackets and turn them into a budgeting tool? What if you could make the process of creating a budget just as fun as filling out a basketball bracket?

Here are seven ways to make your budgeting more fun:

Figure out your priorities: In basketball brackets, these are called seeds – the best-ranked team is No. 1 and the worst is the No. 16 seed. In the world of budgeting your main concern is separating your needs from your wants. Ask yourself, is this item a necessity, or just fun to have? Unlike your basketball bracket, you may not come out with a single winner. You may have various purchases that are important that are placed in the winner’s bracket.

It’s time to pick your final four: It’s important to know what your top four priorities are. We call those food, shelter, utilities and clothing and transportation. It’s imperative that you take care of these items before anything else. That means you’re not buying that new 65″ HD TV until your kids have food on the table and lights to do their homework.

Always do your research: Some people spend hours researching the teams so they can put a sleeper team in their winning bracket. What if you could do that same amount of research and understand where all your money is going every month. And maybe even find a sleeper item in your personal budget.

Be flexible: Just like a basketball bracket, you make your budgeting forecasts based on current data. Just be aware that information and your habits are constantly changing. Stay flexible so you can make your budget updates quickly. Never “set it and forget it”.

Always aim for perfection but expect a little less: How easy is it to pick a perfect NCAA bracket? Did you know it is less than one in 9.2 quintillion? Luckily, making a usable budget is much easier than picking that perfect basketball bracket. A perfect budget doesn’t exist either because there is always something unexpected that comes up that isn’t in the budget – emergency room visit, car trouble, etc. So don’t ever aim for perfection when it comes to budgeting. Just prepare for the unexpected.

Never ignore the past: In budgeting as in basketball there are trends. By looking at the trends in your past budget or spending habits you’ll know your inclinations for future spending. Your trends will tell you if you need to make any adjustments in your current budget.

Reallocate if necessary: Just like in basketball you might have to change your proposed winners or sacrifice teams. Reallocating funds within your budget is a big part of streamlining your budget. Whether you’re simply moving money between activities or shifting larger quantities monthly, keep a watchful eye on every move you make.

Remember, your budget doesn’t have to be a boring task. I agree that comparing your budget preparation to an NCAA tournament bracket is quite a stretch. The point I am trying to make is you can have some fun while getting yourself out of debt and learning some creative ways to manage your money.

How to Handle Instant Wealth

A financial windfall like a lottery win or inheritance is not only about new possibilities, but also about money shock. How to deal with it and turn the sudden money into lasting wealth?

Why can sudden money turn into a living nightmare? Unexpected cash infusion may derail a person’s emotional stability. Many people don’t realize the size of the windfall may be not enough to satisfy all the goals they have in mind. So, if you lose your head, it’s easy to skip something really important. Also, you may experience feelings of guilt and fear, pressure from your family and friends.

You don’t have to get a really big sum of money to start experiencing money shock – 4 months’ worth of salary is enough.

Take some time for cooling off

You need a 6-10 months’ pause to adapt to the money shock and fully understand the limits and the possibilities of the newly found wealth. It’s not uncommon to overestimate it – the fact due to which so many lottery winners fail to prioritize their goals. Certificates of deposit may be a safe way to park the money till you’ll be able to deal with it.

Emergencies first

Think of any emergency situations you have. Having funded them, you need to make sure that you’ve got an emergency fund. Many people already have one, but if you don’t have a dime in savings, that’s what needs your attention first.

Manage debt

At this point you need to act judging from the amount of your newly found wealth. Credit card debt might be your priority, but if it’s going to eat up all the money, don’t clear it up at once. You need to have some money saved for an emergency; otherwise it’s hardly possible to get out of debt. Choose the credit cards and loans with the highest interest rates.

Invest in your future

How many windfalls like this can you possibly have during your life? This may be a chance of a lifetime to safeguard your future. Some of the long-term goals you may consider include saving for retirement, getting a degree or educating your children.

To create an investment strategy, you may need expert help. A financial professional will help you estimate profitability index of projects you’re considering.

The History of Money Revealed

Throughout history a many variation of things have been money. Before the invention things like livestock, rocks, shells, beads and metals like gold and silver were all forms of money. In fact, in ancient time’s people physical exchanged goods directly for other physical goods. For example, if I have fish but needed coconuts and in turn you had coconuts but needed fish, then there would be a mutual agreement between us and a transaction could be made. This way of carrying out exchange was known as the barter system.

The barter system however, brought with it some challenges such as double co-incidence of wants. What if we both needed coconuts? Also, there was no common measure of value and no medium to measure the value of goods so who decides if your coconuts are actually more valuable than my fish?

Commodity money was then created to address this concern. A commodity is a basic item which can be used by almost, if not, everyone. Things like seeds, tobacco, tea, salt and even cattle were considered commodities however, carrying bags of these items over a period of time proved to be extremely difficult… especially trying to carry cattle! There were three main functions to money in these days: money must be a medium of exchange, a unit of account and, a store of value. Although these commodities were considered to be mediums of exchange it was difficult to consider them units of account and given that these commodities were also perishable items they could never truly be considered to be a store of value either.

Then came the introduction of coins and paper money. However, according to Wikipedia ‘due to the complexities of ancient history and because of the fact that the true origins of economic systems actually precedes written history, it is impossible to trace the true origin of the invention of money’. That-said, metal objects were introduced as money because metal was readily available, appeared easy to work with and, was recyclable. Countries around the world were minting their own series of coins with specific values making it easier to compare the cost of various items. Some of the earliest known paper money dates back to ancient China, where the issuing of paper money became common from about AD 960 onward.

Paper money began, what we would call in today’s generation, trending. Nations around the world today all use paper money. Through the evolution of paper money has come a longer list of functions from the previous three. Money must continue to be a medium of exchange and a unit of account however, it must also be portable, durable, divisible, and fungible, which means the dollar in your pocket is worth the same value as the dollar in my pocket. Money has always maintained that it is a store of value however, this is where things begin to turn a bit grey.


Consider that $100 US dollars from just a decade or two ago purchased a lot more goods and services than it would today. The same is true for the euro, the pound, and the yuan. All around the world the money of many nations are suffering what is known as devaluation meaning year after year our money is buying less and less. How then can we maintain that paper money is a store of value?

People all over the world today seem to be working harder for money that is continuously buying less. So, just like the barter system could not be maintained as a viable way of trade, the current system we use on a global scale has also become a broken one. In all parts of the world we have one major inherent problem and that is that our money does not maintain its value.

New Year Money Diet

January is the time of the year when we make resolutions and vow to be a better person, while getting rid of all (or at least most of) our bad habits. One way involves taking stock of our finances and the best way to do this is by going on a money diet.

What is a ‘Money Diet’?

Just as how you’d go on a diet to cut out all the ‘harmful’ food from your meals, a money diet gets rid of all the ‘bad’ spending that you’ve been doing. Call it a financial cleanse of sorts, where you eliminate all unnecessary spending and end up saving more money. It won’t help if you’re a compulsive spender but it will do you good if all you want to do is tighten the belt after spending too much over the festive period.

How to do it…

Make a plan

Start by giving yourself a time frame, so you can evaluate how you’ve done at the end of it, by looking at your expenses and savings. It’s also good to set a target for the end of this time frame, say, to save $1,000 by the end of it. This gives you more motivation, just as an ‘ideal weight’ does when you’re on a diet.

Cut non-essential items

It’s fabulous to check out a new posh restaurant every month or meet the girls for martinis every fortnight but is this really necessary? It could be as simple as forgoing the coffees you have every day from that nice cafe next to your office; a hot beverage from your office pantry is a better option here. One unplanned advantage is that you might realise you’re perfectly happy without these things and actually enjoy staying in and cooking up a storm instead of going out to eat all the time. Or that you really enjoy staying in with a good book (from the library, of course) instead of going out partying.

Get support

Your family and friends will most likely be supportive of your money diet so tell them you’re on it and you’ll find it easier to cope. It also means that they’ll be willing to spend time with you while doing inexpensive activities so you won’t have to hibernate for the duration of your money diet.

Everybody, needs some amount of emergency cash savings in case their expenses rise unexpectedly in any given month.

How big depends on how variable your income is and how much you spend.

If you spend only 20% of your average monthly income, which only varies slightly, you’ll need a much smaller emergency fund proportion-wise than, say, someone who can go months without closing a case, and who spends 60% of his average monthly income.

For instance, a tutor who earns an average of $5,000 a month may actually make between $2,000 and $7,000 each month-$7,000 during exam time when students ask for extra lessons, and $2,000 during the school holidays.

For this tutor, the ideal situation would be to keep his monthly spending to below $2,000. That way, he knows that even in the lean months when he doesn’t have much work, he’ll be able to comfortably cover his monthly costs. He can then feel free to save and invest the balance, after putting some cash aside in his emergency fund.