Selecting A Family CFO

I was reading this article in the newspaper titled, "Selecting a family CFO can limit money strife." Money is one of the top reasons for divorce. Families need to evaluate how they handle money to head off the headaches. Have one person in the family designated as the CFO (Chief Financial Officer) helps. This person would be responsible for managing the budget and investments.

Running a family's financial affairs is like running a business. You need a missions statement, track monthly cash flow, review it to avoid overspending , take advantage of legal tax breaks and work with professional people hired to assist the family, like accountants, lawyers and financial planners.

The missions statement is the outline of beliefs and goals the family is working towards. It can be as simple as paying all bills on time. Or it can included a plan for future retirement or vacations. The CFO of the family must be given the power of making decisions about what can and cannot be afforded and to find the best deal on purchases. The second hardest part is deciding how to invest the family's money. This article suggests that the husband and wife alternate the role every six month so there is no abuse of power and it makes both parties aware of the financial health or illness of the family finances.

This has never been the way we have done it...every six month switch off...would drive me nuts! I was raised to take care of the money and I like taking care of the money...and this works because Greg is ok with me being the CFO. It makes sense since he works full time, the least fun thing for him to do would be to come home and wade through the mail, pay bills and make decisions. He wants to come home and relax on the deck. So, I have been CFO since the first year we were married.

With that said, I have been a good CFO and bad CFO...now I am a great CFO. It was a learning process. How to handle the power??? Is to never use the power. Whenever we are going to spend anything over $100 we check with each other. We shop for big ticket items, check the sales, then go home and discuss what will be the financial and emotional cost to buying the items. Will it mean we can't go out for a while, will it mean no vacation this year??? And bottom line after much learning we do not carry a credit card balance. It we can only afford to buy something on a credit card...then we can't afford to buy it. We save for stuff...and life is less stressful.

We both work hard and so there is the understanding that you should enjoy some of the fruits of your labor...but not where it puts you in debt. So as CFO, I understand that I am the chief of our finances and Greg is the chief of the tribe...nice balance.