Gene Diederich knows the necessity of running your family finances properly better than anyone. As a certified financial planner and CEO of the Moneta Group, he's focused on planning a financial future for every family, from children and their education to retirement and beyond. He sat down with us to discuss how to keep your family in the black.
What's a good definition of "family CFO services," and why do we need them?
Family CFO services is a catch phrase for anything financial that a family would need. Services would include investments, accounting, education planning, insurance, retirement planning, estate planning and income tax preparation and planning, to name a few. A company chief financial officer handles anything financially related to his or her company - that's what we do for successful families. We provide these services for affluent families who have very complex financial lives, which helps take the stress out of managing their money and allows them to rest easy knowing it is all taken care of.
Why do you think we struggle so much with financial literacy in America?
We struggle with financial literacy in America because our dominant culture is one of spend versus save. We have collectively done a poor job as a culture teaching young people the value of delayed gratification and saving. That is why part of what we do as family CFOs is encourage multi-generational family planning in order to help pass along knowledge and encourage financial literacy among all members of the family.
What are some common financial problems people might not even realize they're struggling with?
Most people don't realize the implication of not saving enough. Most don't save anything. In the meanwhile, the cost of healthcare is escalating, the cost of education is escalating and people are living longer such that most need to be funding a 30-year-plus retirement instead of the 20 years of the previous generation.
What advice do you have for a family in more debt than they'd like?
For families in more debt than they would like to be, my advice would be to develop a plan. Cut up your credit cards or commit to paying off the full balance at the end of the month. Look at refinancing your mortgage or other means of reducing your bills. Allow three to five years for the plan to be successful. Figure out a reasonable amount that you can pay down each month on your indebtedness through saving or a second job. Have a party when you accomplish your goal and promise yourself you will never get back into debt again.
What advice do you have for those dealing with student debt?
For student debt, I'd advise the same as above. In particular, I'd encourage moonlighting with a second job or a money-making hobby. It's amazing the creativity I see people employ to make money. Map out the plan and how much you can contribute each month. Once it becomes habit, then you are on your way to success.
What's in the future for family finance?
The biggest trend in personal finance we should be watching is longevity. Modern medicine has worked wonders, and average life expectancies are increasing. Make sure you have a plan that includes you living longer than your parents or grandparents, as it's likely to happen.