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For the past few years, my family picks their favorite team from each March Madness division. Lindsey (oldest) is our athlete and sports fanatic. She has no problem picking teams - she actually knows their stats. Allison (youngest) picks teams based on their location or mascot. Jeff has absolutely no interest in sports, but he has enough information from coworkers and rankings to pick some decent teams. I remember names and reputations, so I pick Kentucky, one underdog, and two middle performers every year.
We keep track of who's team survives the farthest through the tournament. We have fun trash-talking and bugging each other about their picks. The winner gets to pick a dinner out (and dessert!), so the stakes are small.
It's fun to have a little competition in the house. We are also usually home together at some point during the tournament because of spring break. March Madness is an enjoyable distraction for the family.