Why not run the family office?

Chapter 17 in this book is titled, “Why not run the family office?”. 

In highly affluent circles, a family office is a private wealth management firm that manages the finances and investments for the ultra-wealthy and their families. Hmmm, I wonder if the Kennedys have a family office?

But Stanley wasn’t talking about the Kennedys or any other ultra-wealthy family. Instead, he shared the story about Susan, a wife, and mother who handled all of the financial tasks in her home, from budgeting to making investment decisions. While Susan did not work outside of the home, she treated her role as the family office manager as a job and helped her family achieve financial independence over the course of her marriage.

I read this book around the same time that I became a mother and left the full-time workforce to stay at home with our new baby. It was a hard transition for me to go from being a major financial contributor in our marriage to staying at home with a baby and not bringing in a paycheck.

But after reading Stanley’s book, it became my mission to emulate Susan’s success. If you get a chance, find this book at your library and read it, especially chapter 17.

Don’t get me wrong, being home with my new baby (and Toby, the lapdog) was exactly where I wanted to be, but it wasn’t easy to go to one paycheck. While I was still helping my husband from home with his business, I felt like I wasn’t contributing to our finances and that drove me crazy.

But chapter 17 helped me realize that I could contribute substantially to our finances–just in a different way. My new mission was to manage our money to make sure we used it wisely and stretched it as far as possible.

I realized my role in our family was not just of a wife, mother, and homemaker, but also the Family Office Manager (FOM).

After motherhood, this role was my dream job! No surprise there; I write a blog about family life and finances. But with my corporate background and interest in personal finance, my husband and I agreed that I would handle all of the day-to-day financial tasks for our home.

Fast forward 16 years, I am working outside the home at our business and the cute baby in the above picture is now in high school and has a middle school-aged sister.

One thing has stayed the same, I am still the Family Office Manager and I still love this job! In the beginning, I was focused on stretching one paycheck while I stayed at home. Today at age 50+, I still optimize our cash flow, but my focus is shifting towards saving with our daughters’ future education costs, building our net worth, and planning for our retirement years.

Over the years, my FOM duties included:

• Review the day-to-day/month-to-month budget and spending for our household.
• Update budgeting software on a regular basis. After 20 years, I switched from Quicken software to You Need a Budget (YNAB) software in 2018 for our household. There’s a yearly fee and a learning curve, but I love YNAB and it helps me stay on budget and financially organized with our day-to-day checking and savings accounts.
• Pay our bills in a timely manner. Most are now set up on automatic billing which almost makes this a non-issue, but early on when I mailed actual checks, paying bills on time was a top priority.
• Project short-term cash needs. Home, auto, kids, dog, medical, vacation, blah blah blah…it all adds up and it all needs to fit into our budget.
• Shop around for the best price for our big expenses, such as auto and home insurance, medical needs, and mortgage. We have been in our home for over 20 years and I’ve refinanced for better rates at least five times, mostly for free.
• Organize paperwork for tax preparation.
• Prepare the Family Balance Sheet to review with my husband. I created this spreadsheet many years ago as a way to communicate our finances to my husband and I continue to update it and review it with him monthly.
• Manage long-term savings, such as retirement, college savings.
• Implement our Debt Freedom Plan. Once we came to an agreement that paying off our non-mortgage debt was a priority, I put the plan into action.
• I also manage the finances of our business.

My husband’s role in our finances:

• He listens when I need a sounding board for my ideas.
• He helps me make the big decisions, such as the purchase of a vehicle or large household needs. He often takes the lead with research and comparison shopping for these big purchases.
• His primary focus is growing and maintaining his business.

We are still a team and there are tasks that we do together:

• Agree on a budget.
• Create our family’s financial goals and Debt Freedom Plan.
• Review our spending and our family’s balance sheet.
• Discuss and agree upon all major purchases.

My list will look different than your family’s list. And if mine sounds too overwhelming for one person, duties can be divvied up based on personalities and interests. For example, one spouse could handle all of the day-to-day responsibilities, but the other spouse could handle long-term investments.

Has it been smooth sailing? Nope!

While our setup has helped us achieve many of our financial goals, we have made many mistakes over the years. One that comes to mind was the purchase of a used vehicle to tow our pop-up camper. We were in a hurry to purchase the vehicle and disregarded a big red flag, The truck turned out to be a lemon. In fact, it shut down in the middle of a highway and my husband had to be towed home. It was a big facepalm moment for us and cost us thousands of dollars.

Why your family should consider a Family Office Manager:

It’s been over sixteen years since I read that book and I truly believe every family unit would benefit from designating a Family Office Manager. It should be the spouse who has the most interest in the job and in my marriage that person was me.

Money and marriage are a joint responsibility between the two spouses (at least in our home). The FOM might manage the household money, but in no way should they control the money. My husband and I have equal footing when it comes to money decisions even though our business is centered around his career. The fact that I am the FOM helps balance out any feelings of inequality when my husband earns most of the money.

Tips for Success as the Family Office Manager:

Are you interested in the position? Here are some things that I learned over the years, mostly from trial and error.

Treat the position like a job. The FOM holds a lot of responsibility, and like Susan, in the above-mentioned book, the FOM has a huge opportunity to change the trajectory of your family’s finances. You might not be getting paid directly, but you do have the opportunity to save your family money, make money from investments, and increase your family’s net worth.

The FOM might manage the money, but they don’t control the money. Spouses should make major money decisions together.

The tasks will vary by household, so create a to-do list of your family’s financial needs & tasks. Both spouses should agree on what is expected of the FOM and they should set aside time each week to work on tasks.

Meet weekly or monthly as a couple to discuss what’s going on in your family’s finances. There must be open communication.

It’s important to note that choosing one person to be the Family Office Manager does not make the other spouse off the hook when it comes to dealing with finances. Marriage and money are joint efforts. One person might be responsible for the current and long-term tasks, but the other person can not stick their head in the sand and avoid/ignore the finances. They must participate and be included in all major decisions.

Thank you, Susan!

I don’t know if Susan is a real person or a fictional character in Thomas Stanley’s book, but I’d like to thank her. She changed the trajectory of my family’s life. The arrangement between me and my husband has been very helpful in reducing money tensions in our marriage, and we both credit it to our financial successes. When I took over the finances, my husband could focus on serving his patients and growing the business and I felt like I had a role and purpose outside of motherhood.

Does your home have a Family Office Manager? What does that person do in your home? Please let us know in the comments.

I am not a financial professional. I am my family’s office manager who would rather read personal finance blogs than watch Real Housewives of (Insert City), so please consult a professional if you and your spouse are in need of professional advice.