The Importance of Keeping the Non-CFO Partner Engaged  

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In many households, one person emerges as “chief financial officer” (CFO), or the person primarily responsible for managing the finances. This arrangement can make sense, as it can be difficult for two people to share financial responsibilities equally. However, this practice can also create problems if both partners are not aligned in their vision of financial security. Also, if something unexpected happens to the primary financial manager, the non-CFO partner may have difficulty managing the household finances.  

Following are four reasons why it is important for the non-CFO partner to remain engaged with household financial decisions.  

#1 – To collaborate on long-term goals 

As a couple, it’s important to work together to achieve each individual’s goals as well as shared goals. If only one person is involved in making financial decisions, the non-CFO partner’s goals and dreams may not be properly reflected in the couple’s financial plans.  

Working together to establish a comprehensive financial plan can help ensure the household finances are managed in a way that helps achieve each partner’s priorities and goals for the future.  

#2 – To prepare for the unexpected 

Unfortunately, a common challenge for many couples occurs when the CFO partner dies or becomes incapacitated and the non-CFO partner must step in to manage the household finances. It can be difficult and overwhelming for the non-CFO partner to track down and learn to manage the couple’s accounts and investments, which only adds to the stress of an already stressful and emotional situation.  

At a minimum, it is important for each partner to be aware of all shared accounts, financial responsibilities (such as bills) and investments. It is also important that both partners be authorized to access all financial accounts (and have the correct login information to do so).  

#3 – To help ensure both partners are comfortable with all financial strategies 

Another reason why it is important to involve the non-CFO partner in financial planning conversations is that both partners may have different opinions regarding how much risk to take, how much to save, what investments are appropriate, what financial goals they hope to achieve, etc. Working together to plan for the future can help both partners feel more comfortable about their financial outlook and more confident in their particular financial strategy. 

#4 – To establish a shared budget 

In some relationships, one partner is a strict saver while the other prefers to spend a bit more freely. This discrepancy can create tension for both partners if the non-CFO partner feels that the CFO partner is too tight or too loose with household spending.  

A great way to avoid conflict is by working together to establish a budget and spending plan that you are both comfortable with. If your spending habits vary greatly, you may want to consider establishing separate accounts in each partner’s name, then depositing an agreed-upon monthly “allowance” that can be freely spent or saved without the need to confer with one another. This practice can help you both stick to your agreed-upon budget while also giving you the flexibility to spend on non-essential items.  

How to engage the non-CFO partner 

A great way to begin engaging the non-CFO partner is by having a goals-based discussion facilitated by your wealth advisor. During this discussion, your advisor can ask questions of both partners and begin to gain an understanding of each individual’s goals, vision for the future, worries, risk tolerance, etc.  

This discussion can bring up important issues you may not be aware of. For example, within a marriage both spouses may have very different opinions about what qualifies as an essential expense. One partner may believe that it is important to prioritize traveling and experiences above all else, while the other would prefer to sacrifice a few trips in order to save for a child’s or grandchild’s college education. Having an open and honest discussion can help a couple find common ground and compromise on spending priorities. 

It is important to make an ongoing effort to communicate about your finances. Did the CFO partner recently sell off some stock holdings and transfer those assets to more conservative investments? The non-CFO partner should understand why that move was made as well as how to access the new investments. Are life changes impacting your long-term goals? Take some time to discuss how to adapt your financial plan to account for your ever-evolving life. 

If you could use some help involving your non-CFO partner in financial planning decisions, we would love to have a conversation. At United Capital, our advisors go deeper to understand your mindset, your view on money and how your life and money connect. We then apply these insights to create a personalized strategy tailored to your values, priorities and beliefs. Contact us to learn more.  

This commentary contained herein is intended for informational purposes only and should not be construed as tax, legal or investment advice. Past performance is not indicative of future results. Clients should obtain their own tax, legal or investment advice based on their circumstances. The material is based on sources deemed reliable but is not guaranteed.

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