Why Every Household Needs a Financial Backup Plan
In most households, one person acts as the chief operating officer (COO), handling the day-to-day work that keeps the home running. Another person acts as the chief financial officer (CFO), paying the bills and keeping the finances in order. Dividing these duties makes sense. It helps to spread the burden of running a household and lets each spouse focus on what they handle best.
The trouble starts when the COO or the CFO can no longer perform those duties, whether by choice, ability, or circumstance. In 30 years as a financial planner, I’ve seen households handle the COO’s absence fairly well. Families can outsource home maintenance, yard work, cleaning, and shopping to contractors or family members. Replacing the CFO is harder. When the spouse who manages the family finances can no longer do so, the other spouse often feels lost.
The surviving spouse usually says one of three things: “I don’t know where to start.” “I don’t know who to trust.” Or, worst of all, “I don’t know what we have or where the assets are.” That spouse is often grieving a loss and now must also organize finances they haven’t touched in years.
Build the Backup Plan Now
This is why every household needs a financial backup plan. The CFO spouse can keep managing the finances for as long as they’re willing and able, but they should still maintain an organized balance sheet that shows the household’s full financial picture and share it with their spouse. Writing a family love letter that lays out account details, key contacts, and instructions is one of the simplest ways to do this. The couple should also talk honestly about what the other spouse would do if the finances suddenly became their responsibility. In many cases, bringing in a financial advisor early builds the familiarity and organization a backup plan requires.
Some households can lean on family members for help, while others may prefer professional guidance. Financial planning, portfolio management, tax planning, and estate planning can involve specialized knowledge, and some families choose to work with an advisor to help coordinate these areas. A financial advisor standing by as a backup plan works like an insurance policy. Many of our client households maintain the same structure: the family CFO still manages part of the household finances, but has Savant oversee a significant portion of the household wealth, so their spouse knows a backup plan is already in place.
The Cost of Waiting
The saddest and most rewarding calls I get as a financial advisor come from the same place: a grieving widow or widower who says their spouse died and they don’t know what to do. It’s sad because grief compounds with a sense of abandonment when the surviving spouse faces this burden alone. It’s rewarding because I know Savant can help lift that burden. Our advisors regularly walk surviving spouses through the immediate financial steps to take after sudden widowhood. Still, families may be better prepared for these situations by establishing a relationship with Savant Wealth Management as their backup plan before they ever need one.
This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.
Donald D. Duncan
Managing Partner / Financial Advisor
CFP®, CFA®, CPA/PFS, CSEP®, MBA