Once a couple gets married and starts a family, one of the important things they need to figure out is how they will handle their finances. It is important for couples to manage their money and avoid conflicts, which is one of the top reasons why marriages do not last. According to Edric Mendoza, Registered Financial Planner and business anchor, the key to avoiding money conflicts between couples is having defined roles in the home and knowing which spouse handles each role.
Mendoza says that couples need to know the roles in a marriage and compares them to c-level positions in a company. If companies all have a CEO, COO, CFO, and CIO, families also need people taking on these roles and understanding what their responsibilities are to avoid money conflicts.
The CEO – This is the person who is ultimately accountable in the home, and being a CEO at home is not a glamorous role and involves leadership and making hard decisions. Couples and families need to ask themselves and determine if it is the husband or the wife who takes on the CEO role in the home. And similar to the CEO of a company, CEOs at home also need to have vision and look at the big picture. They need to set overall financial goals for the family and determine their financial constraints and how to navigate them.
The COO – The responsibilities of the COO in the home are different from that of the CEO, as they are likely the person who stays more at home than their spouse. They should be able to attend to the day-to-day matters at home and keep track of the things that need to be settled, bills to be paid, and the household help, among other matters.
The CFO – As in a company, the CFO of the home is the one who handles the finances and budget. However, Mendoza advises that the CFO of the home should set aside what he calls a fun fund for their spouse, which is money that they can use for whatever they want. The reason for this is that oftentimes, the CFO in the home controls all the money and that their spouse constantly has to ask them for money, even for small things, which makes it awkward and makes it hard for them to track these expenses.
Mendoza says that in his family since they believe in the teachings of the Bible, it is he who takes on the CEO role. He also advises that assigning the COO and CFO roles can be practical decisions, meaning that whoever is better at handling day-to-day matters and finances can take on these roles.
The CIO – The final role is that of the CIO or Chief Investment Officer. This is the person who is in charge of the family’s future and should be able to set goals about what they plan to do in the future and what their goals are for the future and where they plan to invest their earnings.
It is important to distinguish each of these roles between couples and to handle each role properly. CEOs, for instance, should make sure that all their affairs are in order, like organizing important documents about their properties and investments, in case of any emergency. Finally, Mendoza advises couples to give their 100% in each role that they have in the home. He says that if couples want their marriage not just to work, but to thrive, they should “embrace your role and focus on doing your role to the best of your abilities.”