This is a guest post from Kelly Whalen, a mostly stay-at-home mom who writes about personal finance at The Centsible Life.

As acting chief financial officer of my family, Kim Snider’s How to Be the Family CFO provided me with an education I wish I had received 15 years ago! The book is easily digestible, with five sections, and most chapters easily read in 5-10 minute bites. This proves to be the best way to read the book since it is packed with valuable information.

For anyone at the beginning of their financial education, How to Be the Family CFO provides a wealth of information. If you consider yourself financially savvy, there are still some wonderful reminders, and advice on how to maintain and grow your wealth.

About the author
You may be wondering why you should take advice from the author, Kim Snider. As a mother of four, I was wondering that myself when I read that she was married without children. I wondered how she could speak to my concerns as a parent, but after reading the book I feel like she completely “gets it.” It helps that she has pets who seem like they must be her “kids” — she even set them up with their own trusts!

Snider shares her personal story in the introduction. At a young age, she sold her stock options from a successful Silicon Valley company and became a multi-millionaire. Within two years, Snider left her job, spent a good portion of her money, and lost the rest by entrusting it to her financial advisors without educating herself on the decisions they presented her with. She was broke, in debt, and had to start over.

Now, twelve years later, she’s dug herself out of debt, created her own business, and shares her experience and knowledge with others through classes, seminars, a blog, and her book. With her spouse, she also runs a company called Snider Advisors.

Four steps to financial success
Snider wants you to treat your personal finances with the same care and scrutiny a CFO would use in managing a corporation’s bottom line. According to Snider, the family CFO uses three tools: planning, managing assets and liabilities, and managing behavior. These tools are taught within the context of her four steps:

  1. Plan prudently. Beginning with personal financial statements (one for income, one for balances), Snider wants you to examine where you’re starting. Next she asks you to come up with a vision. She helps you break down your vision into categories and then specific goals using a noun, verb, and a date. An example is, “Pay off all debt, except mortgage, by January 1st, 2009.” Lastly Snider asks you to face the difficult task of planning for the inevitable.
  2. Save prodigiously. If you are financially savvy, you may already have these steps in place, but I’d venture that some of you are like me, just getting started on our road to financial freedom. Snider suggests setting up an emergency fund with six months expenses (not six months salary!), knowing the difference between good debt and bad debt, taking advantage of tax-deferred accounts (especially 401Ks), and saving for retirement before college.
  3. Invest wisely. Snider starts this section by asking, “What is your money’s higher purpose?” She challenges you to aim big, and then asks you to refine your investment plan by having you assess your temperament, your horizon (how long you have to invest), and where you stand on the risk/reward continuum. There are additional chapters where Kim discusses starting early, taxes on investments, investing your money yourself, creating passive income, minding inflation, and remembering to stay the course.
  4. Manage risk. Managing risk starts with protecting your most valuable capital — you! In these chapters, the author discusses various types of insurance, identity theft, and maintaining your credit score. She touches on topics aren’t often covered, such as long-term care insurance, medical identity theft, and protecting yourself from obsolescence.

Though these seem like financial common-sense, the author outlines the steps and gives advice on how to follow through. For instance, many of us know that we should plan our estate, but have you ever considered making a “What if…” file? Most of us know to keep a file where all our important documents are stored, but did you ever consider including in that file a copy of your home inventory, records of your pets’ microchips, important phone numbers, or even family recipes? This is just one of the nuggets of info that Kim shares in her book.

Pros and cons
The steps Snider lays out are overwhelming, and some of them may not be achievable, but her overall message is to make a plan and stick to it. I know it may take me years to complete all the tasks she laid out, but if I act on just a fraction of her advice I know I will will be in better shoes than before (maybe even designer shoes!).

The book’s biggest downfall is the constant reminder of Snider’s investment methods and her company. I understand that she has a business to run, but in my opinion, if I like the book and want more advice on investments, then it would be pretty simple to include a tidbit at the end of the book explaining what she does, and where I can get more info.

I also found the style and tone of the book a little “off”. Snider included quotes in the middle of pages, which broke up the reading in an odd way. I think she must have had so many favorite quotes she couldn’t stop herself from including them. She also tried to convey a conversational tone, but sometimes it feels forced.

That said, I recommend this book to anyone who is the family CFO. Snider offers sound and solid advice, and gives you the steps to really get your finances in order.

For more on this subject, check out Flexo’s awesome guest post from 2006: How to be the CFO of your own life.

This article is about Books, Planning