Approximately 45% of Americans fill out an NCAA Basketball Tournament bracket each year.
Whether you are in an office pool, an online league or are in it to try to win Warren Buffett’s money for the perfect bracket, filling out a bracket makes the tournament exciting and fun.
Is it possible to make budgeting as fun as filling out a bracket? Well, you may not get the gratification in the time frame of a few weeks like the basketball tournament, but you may still achieve a big payout in the end.
Here are some guidelines that can help you with budgeting:
No. 1 seeds are No. 1 seeds for a reason.
Over the last 20 years or so approximately 60% of the tournament champions have been No. 1 seeds. Generally, the best teams of the regular season have the most success in the postseason.
Crazy upsets to occur and a top seed can get eliminated early, but there are most likely three left. A No. 1 seed has never lost in the first round.
In budgeting, what are your top four priorities? Your business priorities could include paying your employees, paying your vendors, purchasing equipment, and new products and services. Whatever your priorities our, focus on revenue-generating expenditures. For example, if you operate a furniture installation company and you attempt to reduce your payroll and lay off several of your crew, one of your top business priorities to service your customers could be compromised. Consider both the short-term and long-term consequences when seeding an item near the top or bottom of your priority list. What do you really need right now and what can simply wait until later?
Expect at least some of the unexpected.
In the Final Four, there has only been one Final Four in which all four top seeds made it: 2008, where Kansas, Memphis, North Carolina and UCLA were all there.
Equipment can break down or a key deal that you were expecting falls through, what do you do? Obviously, you may have to shift your priorities to stay competitive and in the game. Unlike the tournament bracket, you can modify your budget as necessary. Make it a point to review your plan every quarter and modify your priorities as needed. By doing so, you will be able to detect your mistakes and know when you are faltering before a small problem turns into a huge crisis.
Be wary of picking a Cinderella team to go to the Final Four.
It has happened a few times, but the chances are unlikely. Of the 132 Final Four teams since 1991, just 9.8 percent have been seeded seventh or worse.
Business opportunities can be like basketball teams – you may fall in love with them, throw caution to the wind because you believe you can win with the opportunity and then get burned by in the end. You want to make sure you have a solid data-backed reason supporting your budget picks. Spend a few extra hours each month researching and understanding where your money coming from and where it is going.
Perfection Rarely Happens
According to Science Daily, the chances of picking a perfect NCAA bracket are less than 9.2 quintillion. That’s a lot of zeros. Chances are you’re not going to have a perfectly accurate budget. All you can do is put yourself in the best position possible. Take all associated factors into consideration. Review your trends and tendencies in the past to help you decide if and how to make adjustments.
Budgeting may not be as exciting and the NCAA tournament, but the payout can be great. A wellprepared budget can bolster your cash flow or help you secure loans for capital improvements and expansion.