Why I Run My Household Like a Business

Photo (cc) by kenteegardin

Before I started up my blog, I spent my free time as a dedicated volunteer for Little League baseball. And although I rose through the ranks over the years to eventually become a league president, looking back, my fondest Little League memories still come from the time I spent managing my son’s T-ball team.

My first “practice” was a pitiful failure. I was woefully disorganized and, as a result, the 5-year-olds got bored almost immediately. Before long, that practice session looked like something straight from “Lord of the Flies.” I had lost complete control, surrounded by a band of marauding boys who defiantly spent the rest of the hour kicking up the infield dirt and pulling the wings off moths in the outfield.

Needless to say, I made sure the rest of my practices were always well-organized.

The importance of organizing your personal finances

Organization is a means to an end. The truth is, organized people save more time and money than those who aren’t. When you’re organized, you become more efficient and that makes life much easier.

With respect to your personal finances, organization is what enables people to manage seemingly complex and/or enormous jobs, such as tracking their income and outgo down to the last penny, with relatively little effort.

The good news is, getting organized isn’t hard. In fact, all it takes is a little commitment and discipline — and I found that one of the best ways to get organized is to run your household like a business.

My household business organizational structure

In the grand scheme of things, a household is a business with real assets and liabilities. There are revenues, represented by our household income, and there are non-discretionary obligations, such as the mortgage and utility bills. There are also discretionary costs in the form of entertainment, vacations and other noncritical expenses that require careful analysis and smart decisions.

And just as any smart business works to efficiently manage and maximize its revenues, I too want to ensure that our household spending decisions always give us the most bang for my paycheck.

From the day we were married, the family finances have been jointly managed by the Honeybee and me. Each of us has separate responsibilities that are clearly defined, as shown in the handy dandy household organization chart below.

As you can see, it’s not very complicated; I act as the CEO, while she is the CFO. I know. But just play along.

I’ll now go into a little more detail about both of our jobs.

My duties as the household CEO

As the CEO, I’m responsible for long-term and strategic financial planning decisions, including stuff like how much life, auto and homeowners insurance to carry, retirement and investment contributions, emergency fund allocations, and future big-ticket discretionary spending. That requires me to evaluate all household expenses, both past and future, and then determine whether those expenses are discretionary or non-discretionary.

In short, my job consists of seven primary tasks:

  1. Identifying future household expenditures.
  2. Categorizing those expenditures as either non-discretionary or discretionary (“needs” or “wants”).
  3. Developing a household strategic spending plan.
  4. Establishing the household budget.
  5. Ensuring my family understands the strategic spending plan and budget.
  6. Ensuring the strategic spending plan and budget are faithfully adhered to.
  7. Refining the strategic spending plan as necessary.

My wife’s duties as the household CFO

As the CFO, the Honeybee acts as the family’s financial manager. Essentially, in addition to handling day-to-day financial operations, she keeps her fingers on the family financial pulse, always aware of past and impending non-discretionary expenses, as well as any near-term discretionary spending considerations.

In a nutshell, here are her seven primary responsibilities:

  1. Establishing and maintaining our financial records and spreadsheets.
  2. Ensuring all the bills are paid on time.
  3. Actively tracking household expenses and income.
  4. Identifying present and future household expenditures to support strategic planning.
  5. Ensuring the strategic spending plan and budget are faithfully adhered to.
  6. Ensuring the checking account is balanced each month.
  7. Identifying negative financial trends and potential trouble areas.

Summing it all up

Running our household like a business has played a crucial role in ensuring that our family income has been used as efficiently as possible over the years. In fact, it’s been more successful than I ever imagined.

That being said, will the way we run our household work for everybody? That’s doubtful.

Has it worked perfectly for us? Of course not.

But it has instilled a strong sense of organization and financial discipline into our lives. And for most anyone who aspires to take control of their personal finances and achieve financial freedom, that is absolutely essential.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
8 Common and Costly Homebuying Myths
8 Common and Costly Homebuying Myths

Think you’re ready to buy a house? Don’t fall victim to these rookie mistakes.

10 Common Ways Seniors Get Scammed
10 Common Ways Seniors Get Scammed

Here’s what to watch for to make sure you don’t fall prey to some of the biggest rip-offs targeting seniors.

Homeowners Say These 2 Kitchen Appliance Brands Are Best
Homeowners Say These 2 Kitchen Appliance Brands Are Best

One brand takes five of the top honors, while another ranks highest in three categories.

The Worst Nursing Homes in America Are Revealed
The Worst Nursing Homes in America Are Revealed

The nursing homes with a history of providing subpar care previously hadn’t been identified for a government list.

21 Purchases You Should Never Skimp On
21 Purchases You Should Never Skimp On

With some items, it makes sense to pay a little more rather than hopping on the lowest price.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

12 Deep Discounts Available on Amazon This Friday
12 Deep Discounts Available on Amazon This Friday

These items are steeply discounted — but the deals won’t last long.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.