7 reflections on money and financial resilience

doors

This month I was at the latest OECD conference on financial education, bringing together attendees from nearly 50 countries from around the world.

I jotted down various random points but I wanted to put down in a post some of the thoughts I came away with – some new, some simply reinforcing.

5 new things

So glad KiwiSaver is as simple as it is: administered centrally, goes along with you even if you change employer. It would be great if there were tax incentives and if provider fees came down but overall it could be worse.

Economic anthropologists are a thing?! If I was more academic, this would totally be an ideal career path.

Designing financial products for people in a variety of situations is so crucial. I’ve read a lot about apps like Digit but always from the perspective of bloggers trying to hack savings, essentially. But it was raised here as an example of tech that can be used by people with unstable incomes to save when they do have money, but not force it when they don’t.

Financial resilience: I really liked these four indicators of financial resilience. 1) Control over your day to day finances. 2) Being on track to meet your financial goals. 3) The ability to cope with financial shocks. 4) The freedom to take advantage of opportunities and make choices to enjoy life. Speaks to me.

The notion of retiring with dignity: Look, wealth is not just about money. But we will all need money to get by when we stop working. The non financial aspects of wealth will absolutely help make retirement enjoyable but without sufficient funds to cover the basics of living, retiring won’t be much fun at all. I know I want more than just ‘getting by’; I want choices. Working toward a dignified retirement is something I can get behind.

2 reminders

Job and income volatility is a killer for financial security. Between that and other systemic factors like stagnant wages and rising costs, the gig economy and the rise of automation, things really are different for this generation. The benefits of certain trends are borne by certain parts of society but the costs are typically borne by others.

Obvious but something those not on the frontline of financial education/literacy sometimes lose sight of: how hard it is to save when there isn’t much money and life is chaotic. For those in real hardship it’s about triaging the now in order to get to ‘later’. To do otherwise is like swinging a baseball bat while standing in a canoe. At that stage, retirement is the Ferrari of the savings world.

One thought on “7 reflections on money and financial resilience

  • Reply Mr. PIE October 19, 2016 at 14:07

    To your point #7, my wife and I can’t complain about money but OMG chaos reigns with managing two careers and having quality time to attend to the kids. Throw the yucky commute of Mrs. PIE on top of all that and it’s a PIE recipe for disaster. Still, the greater goal is at FIRE and that is the calm in our future to counteract the chaos.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.