Who’s in charge at your house? At my house The Sheconomist is clearly in charge. It works best that way. Partially because I’m really flexible at many decisions (paint color, where to eat dinner, how the furniture should go in a room…) and partially because if I was in charge we’d end up doing absolutely nothing most of the time. A house is like a business, it must do things and churn out a product in order to be successful. Success in the household can be measured by contentedness. The product, or goal, is a happy family. What makes a family happy varies from family to family, but there is at least one tip that can be taken from the business community:
Keep the CEO and CFO in separate offices.
When you look at a business, the CEO and CFO offices are almost separated. The CEO (Chief Executive Officer) leads the company, she focuses on strategy, and is the public face of the firm. She should represent that best your company has to offer. The CFO (Chief Financial Officer) manages all the finances for the firm.
Why are these offices separate? For one thing the CEO doesn’t have time to manager the money. She knows what is going on with the finances of her company, but trusts the CFO to handle the details and serve as advisor in decision that affect the financial situation of the company. There is also an element of checks and balances in the two offices, as a CEO with absolute control over the firm’s finances may use it to their advantage or at the expense of the firm’s health. Likewise, while the CFO manages finances from day to day, he reports to the CEO and about the only way he can get away with something is if the CEO is on in it.
The system operates this way in my house, as long as we’ve been married. My wife is the leader of the household (yeah, I said it) and the details of the finances are left to me. There is a system of trust and mutual respect that allows us to operate in this way. I’m happy to defer executive decisions (like where we’re eating tonight) to her. Personally, I rarely care, so the one who does care about such details should probably run the show. But the other spouse should be the expert on the finances. This allows each of you to be well informed about what’s going on in your family and how that impacts the finances.
If one person does everything, the spouse has little incentive make sure everything is running smoothly. I believe many families get into financial trouble because one person holds both executive offices and the spouse doesn’t keep up with the spending. The spouse is like an associate at a firm. Blindly follows the CEO and supports all decisions that add risk to the company until it’s too late.
Some families may be able to operate to two CEOs, or maybe with one person running everything. And some companies can survive that way too without issue, because the executive in charge knows that the onus is on them not to screw up and ruin the company. But most executives will lose sight of that idea with no checks and balances. I think it’s natural for many families to form into a CEO as one spouse, CFO as the other. But most people don’t think about it that way.
How’s your house run? Are the roles split? Is one person in charge or does the head finance spouse defer executive power to the other?
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
