March Madness has given way to the Final Four Tournament, with the NCAA basketball championship coming up this weekend (good luck to Florida, Connecticut, Wisconsin, and Kentucky!). Consistent with the theme is the arrival of the third annual Financial Four (www.financialfour.org), an interactive bracket of 32 concepts that helps consumers identify their financial priorities. The Financial Four is sponsored by the National Endowment for Financial Education® (NEFE®) and the Financial Planning Association® (FPA®).
The Financial Four is a clever way to determine your financial goals. On the interactive web page, the topics are divided into four groups:
- Growing Your Money
- Learning & Talking About Your Money
- Protecting What You Have
- Spending Wisely
Each group includes several concepts, such as building emergency savings, living within one’s means, and using credit responsibly. Users step through each concept and choose what is most important to them, building their own “bracket” in the process. Clicking submit shows how users’ answers compare to the experts! Each item on the list is also linked to a helpful resource for financial information.
And the results? Expert financial planners and advisors recommend the following as their top suggested “financial four” priorities:
- Live Within Your Means. This was the top choice among financial planners and advisors. Spending less than you earn and living within your income allowance is the best way to ensure you meet your financial goals.
- Pay Yourself First. Every time you receive a paycheck, save a certain percentage of your income before spending money on anything else.
- Rein in Debt. Have less than 15 to 20 percent of your income earmarked for debt payments – excluding mortgage debt. If you pay more than this, you’re in the danger zone and potentially in over your head with debt.
- Maintain Adequate Insurance. Ensure your financial security by having adequate insurance coverage in place for health, disability, long-term care, auto, homeowners’, and renters’ to protect yourself and your assets.
What is your Financial Four? Complete your own bracket at www.financialfour.org.