Are You the Chief Financial Officer in Your Household?

This month, we celebrate military spouses. When I saw the news, my first thought was: This is an easy one; in most military families, the spouse is the chief financial officer, or CFO, of the household.

Sure, I know families are different but, by choice or out of necessity, at one time or another I bet most military spouses have stepped forward to claim the title of CFO.

I’ve read and said that often, but this month I decided to explore it in a bit more depth.

I’ve been involved in a lot of money discussions and money plans and written a lot about money, but I’m not, and have never been, a CFO. So, my first step for this article was to dig into what it really means to be one. A little research led me to the top five “CFO duties and responsibilities” that are common on job listings.

Are you really a CFO? Read on, and I think you will see at least a little of yourself.

1. Executing the company’s financial strategy. The best-laid plans are nothing but a piece of paper or a daydream unless they are executed. I’m the first to say, “Money is a team game.” However, if half the team is unable to participate because of the demands of military life — say, finances during a deployment — guess who is holding the ball? The CFO, that’s you, is left to ensure the right things are going in the right places and everything is on track to achieving the goals toward which your collective strategy drives.
2. Developing plans for growth … while reducing expenditures. Over time, your family’s net worth, your assets less your liabilities, is a meaningful measure to track financial progress. You don’t always have to be on the lookout for opportunities to cut back and cut out, but a dollar unspent is a dollar that finds its way to the positive side of the balance sheet. If you haven’t done so, take the time to see where you are today and start tracking.
3. Identifying investment opportunities and managing mergers and acquisitions. I struggled to find the military spouse link to this particular CFO responsibility. But while you likely won’t be buying any big businesses, as a military spouse there’s a very real chance you might be starting one. And on the spending front, you’ll certainly have a big say in major purchases — home, car, etc. It’s important to get these big decisions right, because if you miss on your big expenditures, your tenure as CFO may be rough. Early in your relationship, it could equate to managing the merger of your finances: How you pay bills, what type of accounts you have, etc. If there’s one point that resonates with me here, it’s the idea of being thoughtful and deliberate about all of your “acquisitions.”
4. Developing financial plans. As a CFO, you play a significant role working with other company executives (in this case, your spouse) in the development of financial plans. Your plan should include all that I’ve touched on here: prioritizing savings goals; spending, saving and investment strategies; and an overall approach to money.
5. Managing accounting procedures. How do you track your budget? Honestly, I don’t think there’s a wrong answer — spreadsheet, app, bank website, etc. — other than not tracking at all. If you’re not a grinder, try the “fund your goals first and spend the rest without accumulating debt” approach.

That’s a large set of responsibilities, and I hope you see yourself in them. The other thing I learned on this journey is that, as your family’s CFO, you are probably highly undercompensated. The average CFO of large U.S. companies is making around $4 million. Which gets me thinking, since we are talking careers this month, maybe that’s your next stop?

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