Friday, February 20, 2009

Money & Marriage - Who's The Chief Financial Officer (CFO)?

Personally I believe managing finances in a marriage is very much like running a business. Just that, it's a life-long business with 2 main business partners, the husband and the wife. From my readings and observations, there are 3 main different styles of money management in a marriage:

1) The husband is the CFO
This is very common especially in eastern regions. Husbands are regarded as the head of the family and thus automatically carry the CFO title. He brings money home, plans all the spending, investment and makes all financial decisions. This style is usually practised when the husband is the sole bread winner in the family.

2) The wife is the CFO
There are women who are really good at managing finances. Even there are man who brings home money and give all his money to his stay-at-home wife. He also give full authority to his wife to do all financial decisions.

3) Both husband and wife are CFOs
When both husband an wife are working and bringing home money, it's fair that both contribute to the CFO positions. Both must list down all financial related matters (spending plan, loan repayments, investments, savings, insurance, retirement planning, children education funds, etc) and divide their tasks accordingly. Both are given authority on their agreed tasks and are responsible for their tasks. Even better when both agree to discuss before making their financial decisions.

Other than the above, there's another money management style in a marriage, which I find more creative is:

4) Husband and wife take turn to be the CFO
It might sound funny or impossible. But, I think it's creative and fun. Even CFO in a company also has renewal term right? If a partner can't prove that he or she can manage the finances well, it's time to pass the cheque books to the other partner. Perhaps, one might not know aware that he or she is good at managing finances until he or she is given the opportunity. It is good to practise to allow 1 or 2 years or 5 years for each partner to take turn to be the CFO.

So, who's the CFO in your marriage? Be it you or your partner or both of you together, make sure that both of you do not let money become an issue in your marriage.

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