The Family CFO is Not the Bad Guy

By Melissa Tosetti

Our homes are like mini corporations. You have incomes from jobs and investments. You have expenses such as your mortgage and utility bills.  You purchase supplies such as food and toiletries.

Two decades ago, the average household could pay their bills by writing four or five checks.  Now, the average household has over 20 monthly bills.  Their financial situation becomes further complicated by their Intermittent Expenses. And none of this includes their spending on such things as dining out clothes and all things Amazon Prime.

Our financial lives are complicated.

Just like in a corporation, one person has to take the ultimate responsibility to oversee Income, Spending and Expenses.  Otherwise, it’s too easy to bleed money and struggle to achieve financial goals.

Sadly, it’s unfortunately common for the person managing the family’s money to become The Bad Guy, The Money Police, The Buzz Killer – and that’s not fair!  It’s not fair especially given that their ultimate goal is to take care of the family and they’re getting chastised for it.

In working with clients we’ve come across this scenario again and again.  The person managing the finances is beat down by it and quite frankly, hurt by their family’s treatment.

The one tactic we’ve helped clients implement to counter this situation is to get both adults involved in the family’s finances by scheduling a weekly meeting to review their financial situation – together.  One member still manages the finances such as paying bills, but both adults review their status and make spending decisions.

It may sound like a ridiculous idea to “schedule a family meeting”, but as mentioned above, times have changed and the days of having just a few bills to manage are LONG over.  Our financial lives are complicated and need dedicated attention.

I joke with clients that the first few meetings might be best held over a bottle of wine, but it should be done in a relaxed environment – ideally, first thing in the morning when stress is light and you’re not fatigued from the day.

The purpose of this meeting is to go over spending from the previous week – are you on target or did you overspend?  This gives you an opportunity to spend more (within your Spending Plan) or if you did overspend, pull back a bit to get you on track again.  Wait another week or two and it’s too late to repair the damage in that month.

The second purpose of the meeting is to look at your calendar for the coming weeks and months.  Are there any Intermittent Expenses coming up that you’ll need to save for?  This also gives you a chance to look at your immediate week – what errands need to be taken care of.  This goes a long way to prevent reactionary mode from a time as well as a money perspective.

One couple I worked with in Boston had a common situation.  The husband paid the bills and the wife bought the groceries, clothes and other supplies for the household.  On any given evening after a tiring day at work, he’d be downstairs updating Quicken and she’d be upstairs giving their girls a bath.  He’d shout out a question about a purchase at Costco on a specific day and while struggling trying to clean two wiggly toddlers, she’d shout down an answer in frustration.  This scenario played out almost every week creating a tremendous amount of tension around the topic of money.

They began to meet on Saturday mornings and were able to review the information in a much more relaxed manner.  Also, because they were meeting weekly, or as close to weekly as possible, there were fewer transactions to look at each time making the process that much easier.

By implementing this habit, clients have been able to achieve their financial goals faster because the entire family is on board through the awareness of where their money is going.  It also takes the burden of the family’s finances off the shoulders of just one person. _________________________________________________________________________

Melissa Tosetti is the founder of The Savvy Life and author of the international bestseller Living The Savvy Life. For the past eight years, she’s worked with over 500 individuals and families to create Spending Plans.

Melissa also works with financial advisors and their clients doing cash flow planning as well as giving over 200 Savvy Living presentations via webinar and in-person to audiences across the U.S.

If you’d like to learn more about how Melissa works with clients visit The Savvy Life’s Programs page.