The Financial Roles in Families: Planners, Non-Planners, and Children

“Who handles the money in your family?”

It’s a simple question, but the answer can reveal a lot about your household’s financial dynamics. Every family manages money differently, and often, it’s not as straightforward as having a designated “money person.”

In most families, financial roles tend to fall into three main categories: the planners, the non-planners, and the children.

Let’s explore each role below and how you can work together to achieve financial harmony in the family.

The planners: the financial architects

Planners are the backbone of a family’s financial strategy. They are typically from the Baby boomer or Gen X generations and are constantly thinking about the future. They worry about what would happen if they weren’t around to manage the finances, which drives their meticulous and organized approach.

Characteristics of planners:

• Organized and detail-oriented: Planners keep meticulous records of income, expenses, savings, and investments. They typically love spreadsheets, budgeting apps, and financial plans.
• Future-focused: Planners are always thinking ahead. They plan for future expenses like education, retirement, and emergencies, ensuring the family is prepared for the unexpected.
• Disciplined savers: They prioritize saving over spending and often set aside a portion of income for long-term goals and rainy-day funds.
• Risk averse: Planners tend to be cautious with investments, preferring stable and secure options over high-risk ventures.
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Challenges planners face:

Despite their strengths, planners face certain challenges:

• Stress and overload: Bearing the financial responsibility can be stressful, leading to burnout if not managed properly.
• Conflict with non-planners: Planners may clash with non-planners regarding overspending habits and financial priorities.
• Difficulty delegating: Planners often struggle to share financial responsibilities, feeling that no one else can manage as effectively as they do.

Non-planners: The financial free spirits

Non-planners provide a different approach to managing family finances. Often from the same generations as planners, these individuals prefer to live in the moment and are less concerned with meticulous planning. They enjoy the present without worrying too much about the future.

Characteristics of non-planners:

• Spontaneous spenders: Non-planners are more likely to make impulsive purchases, enjoying the present without worrying too much about the future.
• Less organized: They may not keep detailed records or budgets, relying more on intuition and general awareness of their financial situation.
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• Optimistic: Non-planners often have a positive outlook, believing that things will work out financially even without meticulous planning.
• Flexible: They adapt quickly to changing financial circumstances and are open to taking risks for potential rewards.

Challenges for non-planners:

The non-planner’s approach can also lead to issues such as:

• Financial instability: Without a plan, non-planners might struggle with financial stability, living paycheck to paycheck.
• Debt accumulation: Impulsive spending can lead to mounting debts and financial stress.
• Conflict with planners: Their spontaneous nature can create tension with more structured planners who prefer to have a clear financial roadmap.

The children: observers and learners

While not yet managing family finances, children play a crucial role as observers and future decision-makers. Today’s young people, particularly those from Generation Z and younger Millennials, are increasingly aware of financial matters.

Characteristics of children:

• Future-focused: They often worry about their financial future and what might happen if their parents face financial difficulties.
• Tech-savvy: They use social media platforms like Instagram and TikTok, as well as podcasts, to gather financial information and advice.
• Seeking guidance: While they’re comfortable with digital resources, they still look to their parents for financial wisdom and real-world examples.
• Developing awareness: Observing their parent’s financial habits allows them to form their ideas about money management.

Challenges children face:

Even the younger generation faces its own set of financial challenges such as:

• Lack of experience: Being relatively new to managing finances, they might lack the experience and knowledge to make informed decisions.
• Pressure and anxiety: The responsibility of future financial management can create anxiety, especially if they feel unprepared.
• Balancing independence and guidance: They strive for financial independence while still relying on parental guidance, which can sometimes lead to conflicts.

The importance of cooperation between financial roles

Understanding financial roles in the family is just the first step towards achieving financial harmony. To truly optimize your family’s financial health, cooperation and open communication are key.

While the planner often handles most financial tasks, it shouldn’t be done alone. It’s important to keep everyone in the loop and welcome their input. This approach helps the whole family understand their financial situation and goals.

Know Your Dosh offers a practical solution to this by providing a platform that enables collaboration. Our platform provides a secure, centralised space for storing and sharing financial information. It enables the primary planner to easily update other family members on financial matters, fostering transparency and collective decision-making.

We provide a comprehensive dashboard where the primary planner can safely store and share vital financial information, including mortgages, investments, pensions, and accounts. After updating the information, other family members can be securely added as “Household Members” where they are kept in the loop about the current financial status in the family.

We also have a personal tax estimator that helps you accurately calculate your tax liability, plan your finances, and maximize deductions, ensuring you avoid underpayment penalties and optimize your tax returns.

Importantly, Know Your Dosh serves as a safeguard, ensuring that if the primary planner is unavailable, other family members can access essential financial information. This feature is particularly valuable for estate planning and unforeseen circumstances.

Practical steps to improve your family’s financial dynamics

Here are practical steps to improve your family’s financial harmony:

• Foster open communication: Hold regular family meetings to discuss finances, encouraging everyone to voice their concerns and ideas.
• Establish clear roles: Define who handles specific aspects of family finances to avoid confusion and ensure all tasks are covered.
• Educate and empower: Promote financial literacy among all family members, covering topics like budgeting, saving, and investing.
• Plan together: Create a comprehensive financial plan that includes both short-term and long-term goals, aligning everyone’s efforts.
• Leverage technology: Use financial tools like Know Your Dosh to streamline money management and keep everyone informed.

Bridge the gap in your financial conversations

Fostering open communication, establishing clear responsibilities, and working together towards common goals, families can create a stable and secure financial future.

To learn more about navigating these roles and ensuring a financially secure legacy, check out our eBook: “Bridging the Gap: A Family’s Guide to Navigating Tough Conversations About Money and Legacy”.

This comprehensive guide will help your family tackle financial discussions with confidence and clarity. Start your journey towards a harmonious financial future today. Download your free copy here.