Written by Brian Page
Having clear roles and responsibilities regarding household finances can help develop relationships
Managing finances is an important aspect of a partnership, especially in marriage. Disagreement over money can strain relationships and cause stress and conflict. To alleviate such challenges, couples often find it helpful to establish clear roles and responsibilities when managing household finances.
One common approach is to divide financial tasks into the roles of a household’s chief financial officer (CFO) and chief operating officer (COO). The CFO and her COO approach is inspired by corporate structures, with the CFO overseeing financial strategy and planning and the COO handling day-to-day operations. This approach makes sense for couples with different but compatible expertise or natural skills.
The CFO and COO approach is common among couples who pool money together rather than splitting or keeping their finances separate.
For a household business structure to run smoothly, there needs to be a clear division of responsibility for managing funds. Doing so helps minimize confusion and potential conflicts by ensuring each partner understands their role and can work together more effectively. And of course, we meet regularly to discuss the current situation.
CFO and COO approaches don’t have to be limited to cash management. This approach can also be used to successfully manage household chores, as long as the division of labor is distributed fairly.
Financial management is a shared responsibility that requires careful consideration and cooperation.
Role of CFO:
A relational CFO is responsible for developing comprehensive financial plans, setting long-term goals, and managing investments. This partner will focus on the larger financial picture and ensure your family’s financial future is secure.
The CFO’s primary responsibilities include:
Budgeting and Financial Planning: The CFO works with the COO to create a budget based on shared goals and values in the marriage.
Retirement Planning: Household CFOs often conduct research and make investment decisions to grow their family’s wealth or take the initiative to find a financial professional to do this for their family.
Insurance and Risk Management: Assess your insurance needs and secure appropriate coverage to protect your family from unexpected financial hardship.
Emergency Fund: Build and maintain an emergency fund for unexpected expenses and financial emergencies.
Role of COO:
The COO manages day-to-day financial operations, ensures that invoices are paid on time, manages accounts, and handles day-to-day financial operations. This partner focuses on the present and ensures smooth execution of your family’s financial planning.
Bill payments and account management: A household COO oversees bill payments, manages bank accounts, and tracks spending to ensure the family’s financial operations run smoothly.
Debt management: Track your debt, including mortgages, credit cards, and loans, and develop strategies to manage and reduce your debt over time.
Financial management is a shared responsibility that requires careful consideration and cooperation. The CFO and COO approach provides a structured way to divide financial tasks and balance long-term planning with day-to-day operations. To ensure the success of this approach, it is important to maintain open communication and equal engagement.
Brian Page is the co-host of the Modern Husband Podcast and the author of Money Marriage U, an online course that helps couples manage their money and home and provides lessons in financial therapy and financial planning. He is the founder of Modern Husband.
Details: You save money. Your partner spends. Don’t let money ruin your relationship.
-Brian Page
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09/19/23 2044ET
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