Reviewing The Big Game

The Baltimore Ravens made their second Super Bowl appearance Sunday, while the San Francisco 49ers made their sixth. The Ravens outlasted the 49ers 34-31 to secure the franchise's second Super Bowl title. 

The original estimates of the economic impact of the Super Bowl on New Orleans ranged north of $430 million, with millions spent on commercial advertising alone during the big game. Unfortunately, just like a startling turnover that can dramatically change the outcome of a game, the unexpected 35-minute partial power outage delay may have affected those original estimates and the franchise as a whole. 

While it is impossible to foresee every potential threat to your game plan, you can still strategize for them. By focusing on your credit and cash reserves, you can build a strong financial defense to tackle unexpected events on life’s playing field. 

Credit: If you haven’t done so in the past 12 months, request your credit report. You get one free each year. Read through it for errors and suspicious activity that might indicate potential identity theft. Not scoring as high as you’d like? Review your accounts and credit limits, and consider closing credit cards, starting with the ones with the highest interest rates or annual fees. You can request lower credit limits on the others. 

Cash Reserves: Do you need to make home repairs or improvements? Will you be paying tuition or fees for children’s or grandchildren’s education and activities this fall? Is there a charity event coming up to which you’d like to make a good-sized donation? How much cash are you going to need for these kinds of items in the next six months? Plan now how you’ll fund those needs while still maintaining an emergency fund for needs that emerge that you aren’t expecting. 

Taking stock of your performance in your financial game can help ensure you have the ability to tackle anything life throws your way. Consider contacting a Certified Financial Planner to make sure your playbook is diversified enough to take on even the strongest offensive lines.

FINANCIAL FACTS 

Enough? – The maximum Social Security retirement benefit that can be received by an individual reaching full retirement age in the year 2013 (i.e., at age 66) is $2,533 a month (source: Social Security Administration, BTN Research).  

Crazy Increase – Annual tuition and fees at an average four-year private college have increased 526 percent in the past 30 years, almost four times larger than the Consumer Price Index increase of 136 percent over the same period (source: College Board, Department of Labor, BTN Research).  

Make It Easy – The IRS announced on Jan. 15, 2013, new rules regarding the deductibility of home offices. Beginning with the 2013 tax year (i.e., returns filed in 2014), taxpayers can use a simplified home office deduction based upon $5 per square foot for up to 300 square feet, for a maximum deduction of $1,500. Please consult a tax professional for details (source: IRS, BTN Research).