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By Rev. Brian Jacks, MBA (Marketplace Pastor)
I was about 10 years old sitting at the dinner table when my father first described our family as a business. He had three jobs at the time and my mother was a public school counselor. I was a bit young then but I remember the vivid illustration. I could not do a lot with the information then, but as an adult, it shaped my thinking about how to manage my personal and family finances.
According to Investopedia.com, a CFO (Chief Operating Officer) is responsible for managing the financial actions of a company; it is the key role within any business. Duties include tracking cash flow, financial planning, analyzing the company’s financial strengths and weaknesses, and proposing corrective actions.
CFOs also ensure accurate, complete, and timely financial reporting; they typically report to the Chief Executive Officer (CEO) as well as the Board and are responsible for controlling the business and its financial affairs, but he or she is not the owner. What a befitting analogy to a Christian home, whether one is single or married or a single parent. We are responsible to manage or control the resources entrusted to us but we should be careful not to claim ownership, which belongs to God. Psalms 24:1 says; The earth is the Lord’s, and everything in it, the world and all who live in it.” Further, in Deuteronomy we are cautioned not to think we own anything but that we remain dependent upon our Lord. “You may say to yourself, ‘My power and the strength of my hands have produced this wealth for me.’ But remember the Lord your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your ancestors, as it is today.”
It is critical that the CFO understands that their role is to manage the finances of the business and that he or she is not the owner. Similarly, every household needs a CFO that is diligent about managing the financial affairs of the home. My father explained it this way – we work and that is the method of generating revenue for the home. We have expenses, which consistent with a business, are our operating expenses. Every business plans to generate profit, generate positive cashflow. Profits are used to either invest back into the business or stored in reserves for future anticipated expenses.
In a home, we have the same task. It is imperative to have a plan to ensure that your income is higher than your expenses and to have reserves or money set aside for future purchases like a home, debt elimination, education, and retirement – a time when we anticipate less income. We also need reserves for any emergencies that may arise.
If you are single, you are the CFO of your household whether you have mentally accepted the position or not. If you are within a married family structure it is important that someone function within the role of CFO, remembering that the CFO reports to the board and is responsible for informing the organization with financial reporting. Every successful business creates a budget each year and the CFO works with the organization to make sure it is adhered to. Similarly, in the home, a financial plan is a budget, and the entire family should work together to support living within a realistic budget or financial plan.
Diligently keeping track of our finances is pivotal to successful financial management. We are admonished to be diligent in financial management. Proverbs 27:23 says; “Be sure you know the condition of your flocks, give careful attention to your herds:” You may not have flocks and herds but we all have bank accounts.
In future articles we will explore in detail various aspects of financial management as well as the specific tasks of the CFO. However, here is the question to ponder: Are you the CFO in your home? If so, have you mentally accepted this role? How are you doing with your CFO responsibilities?