The Household CFO : Using Job Analysis to Define Tasks Related to Personal Financial Management

In many ways, the management of a household's personal finances is a job that can be analyzed and evaluated like other occupations. Household financial management has several criteria of performance (e.g., savings rate, net worth) making it possible to evaluate the relative effectiveness of an individual in the particular job. In the relatively young field of financial planning, there has been little analysis of the myriad tasks and behaviors that are included in the role of a household financial manager, or what we term household chief financial officer (HCFO). Using techniques from industrial psychology and personnel selection, namely job analysis, the current paper attempts to define categories of critical tasks and behaviors of the HCFO job using two studies. In Study 1, we examined the frequency and importance of a series of household financial tasks using a sample of affluent individuals responsible for financial management within their households. This study provided a rank order of critical tasks through the creation of an overall criticality score. In Study 2, we examined the frequency of engaging in household financial tasks using a crowdsourced sample of individuals responsible for their household financial management to determine if the same tasks would be identified as frequent within a comparison group. The results of the studies identified the frequency of engagement of financial tasks across the two samples, as well as differences in frequent tasks between the two samples. This paper adds to the literature in two noteworthy ways. First, the paper illustrates how concepts from industrial psychology can be applied to situations outside traditional organizational structures. Second, the paper adds to the multidisciplinary nature of financial planning by identifying the critical tasks of any HCFO and highlighting potential predictors (knowledge, skills, abilities, and other characteristics, or KSAOs) that can be used to assess and ultimately develop those who are in the role of managing their household's finances