Friday, March 04, 2016

March Madness and Your Finances

March Madness is always action packed and full of surprises. Everyone will be watching to see what teams are selected to play and the teams that advance to each round. With all this excitement about March Madness, consumers should use that same excitement to improve their financial situation. 

Some consumers go into debt watching March Madness: ordering cable sports packages, hosting game parties, going to sports bars to eat, drink and watch the games all day, buying tickets to live games, and buying sports memorabilia. All of these costs can add up and cause you to overspend.
The goal of basketball is getting the ball to go securely in the net to score points. 

The goal of improving your financial situation is getting out of debt, increasing your credit score and your liquidity.  If you are obsessed with watching March Madness you may be obsessed other things. This year use that obsession towards your finances. Use your tax refund to improve your financial situation. If you are spending more than you earn, living paycheck to paycheck or have little to no savings or retirement, here are 6 ways to improve your financial situation. 

  1. Don’t hit an air ball – Many people file bankruptcy multiple times as an easy way to get out of debt. You should only file bankruptcy as a last resort. Filing for bankruptcy greatly lowers your credit score and remains on your credit report for 7-10 years.
  2. Ball control – Manage your finances by reducing expenses and reducing debt. Taking control of your finances is key to developing good spending habits and reducing the change of having a financial crisis. The total amount of debt you owe contributes to 35% of your credit score.
  3. Shoot for a basket – Set financial goals as part of your budget. Develop an action plan to achieve each goal. Creating a budget helps you live below your means, reducing your spending and reduces your chances of going into debt. Your total monthly debt excluding mortgage and car loan should be no more than 10% of your total monthly gross income. 
  4. Don’t try to achieve a bury – A credit score or FICO score ranges from 300-850. Only a small percentage of Americans, less than 5% achieve a score in the 800’s. Focus on paying down debt, paying your bills on time and getting current on any late accounts. These actions will help increase your credit score. Don’t focus on getting a perfect credit score, focus on getting the best credit score you can.
  5. Don’t stay cold – Many consumers have tried different methods on their own to get out of debt. If you are unable to improve your situation on your own, don’t stay cold – get professional help from a credit counselor, financial coach or financial planner.
  6. Avoid disqualification – You can lose your job or get disqualified from a job by having bad credit. Bad credit can also prevent you from being approved for a loan or line or credit.

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