Appoint a Family CFO

Monitor the Family Finances

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 would instantly agree with the importance of this corporate role, many of us do not have a similar role for our family finances. 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. If our accounts balance at the end of the month, it’s due more to good luck than to active planning. If our accounts don’t balance out we’re likely to feel angry, resentful of our partner’s spending, and discouraged.

The key to bringing harmony and peace 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. The CFO lays out the family financial roadmap and defines spending rules for the family.

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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 it’s 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 DebtGoal system.

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.