7 Steps To Creating a Family "Company" with You as it's Chief Financial Officer
The COVID Crisis of 2020 has revealed to many of us that our home finances are just not where they need to be. With the hussle and bussle of our busy lives, it was easy to ignore the fact, that we were unorganized, unprepared and simply unaware of our financial fragility. Now, with sanctioned stay at home orders, we can't help but slow down and take a good look around. We can see clearly that our homes, finances and even our relationships were not prepared for the crisis that hit us and now, we have no choice but to sit down and analyze our real situation. No longer can we continue to keep doing what we were doing. Now more than ever, we have to put systems in place to make sure that our family is in a better position to handle any crisis in the future.
Your family is a "Company". Every successful "Company" runs on systems. To set up a few systems that can help your home be more efficient, here is a seven step plan to get you started:
We start by determining how we want our home to be run. This sounds simple enough, but really think about it. Do we want it to look like a school playgroup or a military base? As a couple we must be in agreement on what you want to accomplish. Does chaos have to continually be your norm? Are you really ready to commit to creating a new normal? I want to help!
Consider looking at your current employment, is it enough? Or is now the time to explore the new job or business idea that you never had time to truly look at before. If your current employment is not enough to truly run your household effectively, other streams of income must be considered.
Also, now maybe a great time to declutter and sell. Whatever the need, now is the time to figure it out. You have to sit down and take the time to determine what economic engines will be running your Family "Company".
Since we have now determined we want to run our home like a company, what does that look like?
Numbers don't lie. Once you look at what's coming in and what's going out, you have to make the tough choices that are necessary to save your "Company" from ruin. It's not hard to figure out that more is going out than is coming in, but you would be surprise to know how many people live life hoping and praying that somehow things will miraculously come together. As a new CFO, do the numbers and you know, is there enough money coming in that is needed to run this "Company"?
Any successful company's Chief Financial Officer will tell you, "In order to save the company, we had to downsize." Downsizing is not a bad thing. It shows real courage and understanding of the issues needed to save the "Company".
We must have well defined roles. Can you imagine what any fast food restaurant would look like during lunch hour with a staff not knowing what their roles are during your short lunch break?
As the CFO, you need to know all tasks and who will be handling them. In addition, money must be designated for different things. Any dollar without a destination will disappear! Once all the family has received their titles then comes the job description.
You can't have three checkbooks to one account, there has to be a system to spend money and budgets established.
We must be in accord not only the job description but also with our ability to fulfill it. In many cases it is not uncommon to have assistance from your partner in fulfilling roles. All this "assisting" is another form of "communication" that keeps you and your partner aware of the financial situation. Your partnership and mutual participation in this effort will breed success after success!
Don't be afraid to let your kids in on the plans. They too can learn from the "Company's" goals. Giving them tasks will also show them how important money management is, and if you can reward them by compensating them, they will understand why the "Company" needs to run the way your are running it.
Just like in any company we should acknowledge any accomplishments that we have each achieved. For example, paying off a credit card or a car note is a big deal, so celebrate it.
Making all "A's" in school or paying all bills on-time for a year should be acknowledged. These milestones are important markers that will continue to breed success in your family "company". Once everyone is on-board, no longer will you have squabbles with the kids or your partner about money and why there is not enough.
Have frequent briefings presenting general reports. Bringing everyone to the "boardroom" is important if you want a successful company. New systems can be tough to adapt to, but making your family meetings fun and interactive are important.
Remember, when all of your family understands that there are goals set, budgets in place and systems to move the "Company" towards whatever destination you have set sights on, everyone can get excited to be apart of the plans.
Set realistic financial projections and goals, and be sure that every member of the "Company" gets involved. No matter how small, children understand systems and they crave consistent stability. By getting them involved, you would be surprised at how much they will help motivate you to stay on task.
By doing this, kids will come up with their own ideas about saving and producing revenue instead of always spending. When you share projections and goals, they will take pride in knowing that they were apart of the success of the "Company".
Perform your tasks in Love! Systems, structure and goal setting are all important steps to creating the stability that your family craves. Your partner and kids will see your family as successful in loving each other when they understand that your plans that you have outlined are made in love. By providing, systems that everyone can participate in, understand and assist in planning, the entire family can then take part in celebrating the successes.
As a father and a husband, these are all practical steps that I have set up in my own family that has made life fun and excited for us all. My kids get "paid" every Friday for the chores they get around the house and I allow them to spend the money as they choose (with a little guidance, of coarse). My wife works on a weekly budget for shopping and supplies. These systems have been in place for years and it helps set expectations that are realistic and attainable.
These systems have given us the freedom to travel the world, live outside of the United States and participate in recreational activities that we could only dream of. It's because of the Love that I have for my wife and kids that I have spent my thirteen years of marriage creating and environment by which we can be financially stable.
Jason Thomas is the Founder and CEO of Future Family Finance. His company has help thousands of families eliminate hundreds of thousands of dollars of debts in record time. He is married to Author and Business woman, Carmen Hope Thomas. They have 2 sons, Jahlon and Jai and they live in Kingston, Jamaica.