Product Management Concepts for Better Personal Finance

These 9 simple tips can make a huge difference in money management

Image: Roy Scott/Ikon Images/Getty Images

1. Understanding the User

The first and most important step in both product management and personal finance is understanding the user.

2. Performing Quarterly KPI Reviews

In product management, key performance indicators (KPIs) are used to measure how efficiently a product is achieving its business goals; they include engagement, profit, cost, customer retention, etc. Companies regularly review KPIs to ensure their processes are going as planned or to make strategic adjustments if the measurements seem to be off.

By making decisions after a brief, methodical reflection, you avoid making purchases based on random impulses.

Nobody’s ecstatic when the time comes each quarter to sit down for 15 minutes to look over finances. The same could be said of product teams for KPI reviews—these meetings can feel a bit repetitive and boring, but usually, they’re a valuable use of time in both arenas.

Screenshot from my Google Sheet Template/CC BY 2.0
Screenshot of my investment portfolio over the last 14 years from my quarterly balance sheet

3. Maintaining a Big Purchase Backlog

In product management, backlogs are used like to-do lists. Often, the to-do items are features a business wants to add to a product. The backlogs provide brief descriptions of the features and organize them by priority so teams have a clear picture of the past, present, and future of what they’re working on.

Screenshot of my family’s Big Purchases board from Trello

4. Creating User Stories

The quarterly KPI reviews and the big purchase backlog both help you to understand financial behavior. To help clarify what’s important to you and your family—to differentiate between your wants and your needs—I’ve found creating simple user stories for big purchases to be a useful tactic.

You don’t have to be a product manager to apply these concepts to your own personal finances.

This example, which we actually did (and turned out great), was certainly a want and not a need. But, it was a feasible project, and it improved my family’s overall happiness. In this case, I also insisted on an MVP first, which involved simply setting up a folding table in the room before purchasing more permanent workstation furniture.

5. Estimating with T-Shirt Sizes

In product management, T-shirt size estimation is used to gauge the scope of a project or task when it’s entered into a backlog, so that it’s resource allocation requirements (time, money, team members) can be readily understood. To avoid spending too much time and energy, gauging the scope of a project or task, general measurement levels (like T-shirt sizes) are applied as a basic estimation. A low-intensity task would be labeled with “S” for “small,” whereas a more complex project might be labeled “XL.”

6. Planning for the Unexpected

In product management, “operational hygiene” is embedded into a product to best ensure it operates the way it’s intended. This can come in the form of staging environments, backups, monitoring, etc.

Often, the practices of clarifying roles and avoiding technical debt go hand in hand.

In personal finance, it is paramount that precautionary measures be taken early on to ensure your overall short- and long-term financial security. Items like life insurance and establishing a trust: You can’t wait until you need these types of things to secure them because it will be too late—and not having them in place can be incredibly damaging financially. I’ve also added likely replacement items to my backlog for things like our aging air conditioner or backyard fence.

7. Competitive Benchmarking

In product management, competitive benchmarking is the process of periodically measuring a product or business against its competitors to gauge performance.

8. Clarifying Roles and Avoiding Buildup

In product management, it’s extremely important that each team member has a clear definition and understanding of their role. It is also important to avoid “technical debt”—the cost of choosing the easy way out when approaching a task and then having to go back and fix it later—that slows down the development process. And often, the practices of clarifying roles and avoiding technical debt go hand in hand.

Simple concepts seem to make big differences in personal finance.

In personal finance, clarifying financial roles within a household can help avoid actual financial debt. When my wife and I were first married and our finances were merging together, it was often unclear who was supposed to be doing what. Household bills would get lost. I would think she had paid them, while she was thinking I had paid them. In the end, we started racking up late-payment fees for bills we had the money to pay for but just weren’t because of disorganization.

9. Leveraging Cloud Services

In product management, leveraging cloud services like Trello and Google Docs can help teams collaborate more efficiently.

Product & Tech Leader for digital TV entertainment, two-sided marketplaces and mobile apps used every day by millions of people. http://www.prestonsmalley.com

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