The Gatherer - Volume 9

AGILE PERSONAL FINANCE

1. Bite-sized chunks How do you eat an elephant? One bite at a time. Instead of looking at a list 50+ items long, pick one thing you want to achieve. Just. One. Thing. Work out what the steps are to make that One Thing happen. For example, if I were looking to get my mortgage interest rate down instead of applying for a mortgage ‘holiday’, the steps would be: –– Find out what my interest rate and repayments are right now. –– Shop around online for competitive rates that still allow what I prefer (offset provision and not fixing my rate). –– Work out what I want my rate to be. –– Call the bank branch manager and ask for a rate reduction. –– Based on the outcome of that conversation: celebrate, or decide if I’m annoyed enough to go to a competitor. That’s your to-do list. Not the 50-plus-item laundry list of everything you need to change. Map out when you’ll do each action over the next week, or fortnight if you prefer. Schedule the time in your calendar if needed to get them done. Then get them done. Once it’s done, pick the next One Thing. Rinse and repeat! (In agile theory, these small-batch tasks are called ‘sprints’). 2. Iterative planning It’s a common misconception that agile equals no planning. It’s actually the opposite: agile requires planning on steroids. Long term planning works when the conditions and outcomes are well known and unlikely to shift. That’s not what our next few months will be like. Swift and dramatic change is to be expected as we move into FY21. Your approach to money may need to change dynamically too.

Iterative planning means: Checking regularly – daily, or every couple of days – to see what’s changed externally. I don’t mean checking your social media feed. Have a squiz at the Australian Government homepage and your State government site to see what’s been announced. Does anything new affect the One Thing you’re working on right now? If yes, adjust your plan accordingly. Checking regularly to see what’s changed for you as an individual. Has your employment situation changed? Have you drawn down on your savings? Are there any curveballs to deal with – health, wealth or otherwise? Does this affect the One Thing you’re working on? If yes, adjust your plan accordingly. Of course, nothing may change enough to impact your approach to money. The plan you create now might work throughout your entire life. If that’s the case, you’ve got nothing to lose through iterative planning anyway – you just validate your plan is correct and keep going each time. Either way, you’ll know you’re on track, rather than wondering. That’s the best recipe for sleeping well I know. Lacey Filipich helps people become financially independent and reclaim their lives. She founded Money School in 2010 to build financial capability in adults and Maker Kids Club in 2017 to teach children money skills through enterprise.

Rapid response & readjustment

“ Of course, nothing may change enough to impact your approach to money. The plan you create now might work throughout your entire life.

Pandemic days feel like dog years. With so much changing each day, with so much new information to process, a set-and-forget approach to your money may not cut it for the next few months. You’ve probably realised this already. So you write a financial to-do list: check your interest rates, negotiate with lenders and landlords, find out if you’re eligible for help like JobKeeper or JobSeeker, decide whether to claim early superannuation (super) release, consider a change in super mix, decide whether to keep salary-sacrificing to super, consider buying some shares while they appear to be on sale, wonder if it’s time to sell that investment property… The laundry list quickly becomes overwhelming. Before you know it, you’ve chucked the whole thing in the too-hard basket. Relatable? You might find an agile-style approach works better for you. I know. ‘Agile’ is a corporate buzzword so widespread in use that its meaning has become vague. But I can’t think of a better way to describe what I’m proposing. Which is:

LACEY FILIPICH Founder of Money School

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