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Life Happens - Agile Financial Planning


John Lennon sings “Life is what happens to you while you are busy making other plans” in the song Beautiful Boy.  I have often heard similar sentiments about comprehensive financial plans. The words are something like “The financial plan is obsolete as soon as I receive it because life happens.”

During my software career, I heard similar comments about software planning documentation delivered before any code was developed.  The common thread between software and financial planning documentation is that the planning work is often completed up front before any action is taken.   It is assumed that everything “flows” logically from one step to the next, like a waterfall. The software industry creatively named this way of working the Waterfall Method.

Change is a Given

So what if we just assumed that you will experience change while we are developing and implementing your financial plan? You could experience a job change, an unexpected illness for you or a pet, or maybe your son and granddaughter move into your house.   Changes like these could obviously throw a wrinkle into a well thought out, one-time comprehensive financial plan.

What if instead, we tried to develop your overall objectives and priorities first and ranked them?  We would break each into smaller steps and focus intently on a handful of priorities for a period.  We would re-evaluate objectives for the next period while adjusting to changes in your life.

A popular software method exists today to accomdate change and is called Agile Development*.  What if we applied the Agile mindset to financial planning and how might that look?

Planning in Pieces

With a big assist from technology, you will work with your financial planner to participate in a financial planning experience. You will still meet with your financial planner up front to get to know each other, develop overall objectives and gather initial data. 

Cloud based financial planning portals and secure document vaults play a big part of the experience. Interactive financial timeline software can also be used to keep track of the different objectives and recommendations.  The technological possibilities for the future are endless.

A very simple timeline for year one might look like the following example.  I will liberally borrow from the Agile community and use the word Sprint to denote a period.  Formal meetings are scheduled, often virtually, to plan for each Sprint.  During each Sprint, informal communication takes place via email and phone and client portal to implement agreed upon recommendations.

Sprint 1 – January through March

Objective: Make sure savings and investment strategies are on track.

Focus: Overall cash flow and investment analysis.

Sprint 2 – April through June

Objective: Identify major risks and ensure they are addressed.

Focus: Risk assessment and insurance policy review.

Sprint 3 – July through September

Objective: Maximize employer provided benefits.

Focus: Review options during annual reenrollment period.

Sprint 4 – October Through December

Objective: Make sure that the estate is in order.

Focus: Review current estate planning documents and discuss with estate attorney.

Year two and beyond would look similar, but the length of the Sprints may increase since your financial life may be settling down a bit. 

I hope that I demonstrated how an Agile approach to financial planning accommodates change.  I am not trying to diminish the value of a one-time plan for someone who wishes to validate their current financial status and make adjustments.  But, for someone seeking ongoing collaboration and coaching, an Agile approach makes a lot of sense.

I am pleased to offer ongoing financial planning services using some of the latest technology available to financial planners and their clients.  If you would like to learn more, please click here to schedule some time for us to speak.


*Please visit the following links if you are interested in learning more about Agile Development:  scrum alliance; agile manifesto