Few recognize the true attributes of what it takes to be a financially successful family.
It is not necessarily the income you make, the money you inherit, or how well your investments perform. It is about a strategic plan that can be flexible for the changing needs of the household without compromising the end result.
All businesses start with a vision. All households should do the same. Have you and your spouse discussed your family vision? Do you set aside time together each week to discuss, plan and delegate the household financial matters? If not, then continue reading this column or you will miss the key reasons why families succeed in running their finances.
Successful families discuss their finances. Have you ever heard the saying, "People do not plan to fail; they fail to plan." Nothing could be closer to the truth when it comes to your family's financial matters. It is not important which spouse is the financial "guru" of the family, or who actually writes the checks to pay the bills each month. What does matter is that you discuss your finances, and how you wish to run them, in frequent intervals.
Select a certain day and time, perhaps a Saturday morning. Let this be your time, dedicated strictly to financial matters.
There should be no discussion about your golf game, that evening's dinner engagement, the children, the football game on TV or anything else unrelated. Wise words of wisdom . . . "be sure to keep an open mind."
Critical financial decisions are generally made jointly by both spouses in most families, though few actually engage in active discussions about their current situation or proposed plan of action. These discussions should center around reviewing your cash flow, analyzing income and expenses and expected cash on hand for reserves at year end. Remember, running your finances is like running a business. . . plan accordingly.
The inventory of your assets via the compilation of a balance sheet and the comprehensive review of your portfolios can be saved for your meetings with your financial adviser. Weekly discussions should center on financial decisions and setting priorities. Determine any unforeseen circumstances that could hinder or help your financial health and define your expectations for the next six to twelve months.
The second reason for some of the most successful financial families, they have a plan. Spouses who learn to work together, plan out their priorities and set time schedules feel more comfortable with their decisions. Plan your financial matters for the next three months at minimum and design a specific plan of action.
Be sure both of you understand your needs and the expected results of your plan. Set dollar amounts to your priority items. A telephone call or personal meeting with your adviser will many times be a natural part of your planning process, especially when making major financial decisions for the family.
Kim Ciccarelli Kantor is president and founder of Ciccarelli Advisory Services Inc., 3066 U.S. 41l N., No. 202, a family owned and operated firm in Florida and New York. The firm provides comprehensive financial investment and estate planning services for individuals, families and businesses. Information: 239-262-6577.