Recent research, including the 2019 Women, Money and Power Study, suggests that nine out of 10 American women will one day assume responsibility for their finances, and most will struggle with this role. This data indicates two very important realities: (1) these women are not currently involved in the financial decision making of their lives, and (2) most women do not currently have the know-how or tools they need to be money savvy now or in the future.
Becoming a CFO by choice or circumstance is not easy. Losing a spouse, by divorce or death, are the most common ways for women to assume the chief financial officer role of their own household. Whether the “promotion” comes as a surprise or has been long expected, these suggestions are designed to pave you a path for financial success and stability.
Remain Neutral and Calm
Being the financial director of a business means exposure to a lot of information, emotions, and varying priorities. The same is true when managing money in a household. Domestic and industry CFOs need to make small and big decisions every day. They need to remain calm in the face of hardships and objectively pursue what is best for the company or family; they make plenty of decisions under a tremendous amount of pressure. Turbulent times and transitional periods must be weathered by financial, not emotional, considerations. During and after a divorce, it can be hard to navigate the new economic realities of your life alongside the emotional upheaval of your divorce. By letting logic lead the decision making, and leaving sentiment aside, you- as the CFO of your life and home- can be confident of the outcomes.
Being a CFO is about more than just crunching numbers. Chief Financial Officers are immersed in the day-to-day operations of a business, ensuring that the appropriate financial resources are allocated to growth targets and business goals. Taking on the CFO role in your personal life necessitates knowing where the money comes from, what it is spent on, and how it can be saved. Women report three factors for their lack of financial involvement: insufficient research (37%), not knowing who to talk to (36%), and absence of time (25%). All of these issues should not be an obstacle for you, the newly “hired” household CFO. A minimum amount of research combined with the sound advice and counsel of trained professionals, can go a long way. A financial advisor, certified divorce financial analyst, and/or a trusted banker can offer you insight into past financial performance, present expenditure and income, and future monetary outlooks.
Be Prepared and In The Know
It is impossible to predict what will happen to the economy. Markets can crash, industries can fail. Successful CFOs are prepared for these changes. They have strategies and information that can inform their decision making before, during, and after a crisis. Any woman knows the unpredictable nature of family life and homeownership, (i.e. someone needs braces, the boiler needs fixing, etc.). You, as domestic CFO, should have a backup plan for all contingencies. CFOs, the professional AND the personal, are financially savvy. But they are also open-minded enough to accept input. They put the right people in place to help them get things done reliably. With the assistance of a financial team, all CFOs can skillfully assess and address short- and long- term money realities. Any woman assuming the CFO position for herself and her family, needs to be smart about money and put the right people in the right positions to ensure her current and future success.
What separates a good CFO from a great one is their ability to achieve pre-defined goals. Establishing clear aims, and getting things done in the pursuit of these goals is the foremost priority of any effective CFO. So whether the bottom-line is corporate or personal, a stellar CFO takes any and all measures toward a thriving business or home. As your own CFO, objectivity and accountability should guide your goal setting process. Once a plan is in place, you should assume full responsibility for putting that plan into action.
In today’s day-and-age, women are assuming every position in all spheres: leading businesses, innovating across industries, and proving their professional prowess. Whether you want the CFO job or not, whether the promotion is a shock or mutual decision, you can and should be able to be the financial directors of your life.