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In the corporate world, the Chief Financial Officer supervises and approves all the financial spending of the company. In a very real sense, the CFO’s job is to ensure that money is allocated wisely and in a way that is consistent with the company’s goals.
Surprisingly, although most of us instantly agree with the importance of this corporate role, many of us do not have a similar role at home. Most of us manage our finances ad hoc, making spending and savings decisions independent from other family members without any coordination, information feedback, or discussion on where we stand.
The key to bringing sanity back to your household finances is to appoint someone to actively monitor your family’s financial performance—the Family CFO. The CFO in your household aligns the financial practices and expenditures for your home with its financial goals. This member understands the importance of spending as one unit.
How to elect the Family CFO?
Ideally you will want the family CFO to be the same person who guides the family finances. The family CFO will be the person most interested in reaching the family’s financial goals. The family CFO should have the time to manage your finances. It is common for the military spouse to play this role since the spouse does not have the opportunity of being deployed or to have other mission related issues that arise.
What Does a Family CFO Do?
Serving as a family CFO is a very important job. This individual is the one who is responsible for helping the family define their financial goals, owning the goal, managing, communicating, and keeping the family’s eyes on the prize.
- Owning the Goal: Ensure its financial goals are met. Even if the entire family is on board with the plan, ultimately, it is the CFO who has to own the goal.
- Managing the Plan: Keeps track of the family’s debt-reduction progress. He or she guides family members toward your goal using the concepts of the SavvyMoney system. If your family is on base, seek out your military financial counselor or look into other available financial resources on base. The military dislikes you being in debt as much as you do. Make yourself aware of all the benefits the military has to offer such as – you BAH, BAS, TRICARE, VA benefits, etc. A great resource for this information is on Military.com under the benefits tab.
- Communicating Progress: Family progress can be communicated around the dinner table to allow for efficiency and bonding time. Sometimes your family’s game plan may need some re-tuning. The family CFO will communicate why and how a new goal, or a new path, should progress.
- Keeping Your Eyes on the Prize: This is the most difficult and important role for the family CFO. The family CFO will guide the unit and ensure everyone stays on track.
The family CFO aligns the family’s financial goals and sets the unit on track for success. You will find sanity within yourself and your family unit once this individual has been chosen. Prepare yourself for good things to happen with your family finances if you follow this concept.
Next, you’ll learn how to negotiate lower rates on all your credit.
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