5 Money Lessons I Learned as a CFO That Apply to Real Life

Filed under: Work & Career

Attention

I spend my workdays deciding how a school district spends millions of dollars. My evenings look a lot more normal: grocery budgets, the dog’s vet bill, deciding if the thing in my cart is a want or a need.

Turns out the gap between those two worlds is smaller than you’d think. Here are five things I learned running a district’s books that I use just as much at my own kitchen table.

5 Personal Finance Lessons From a CFO’s Playbook

1. A budget is a plan, not a punishment. Most people treat budgeting like a diet: something you do when you’ve been bad with money. I treat it like a map. It doesn’t tell you no, it tells you where you’re actually headed, so you’re not surprised when you get there.

2. Know your fixed costs cold. Every district I’ve worked with lives or dies by understanding what it’s locked into before it plans what it wants. Same at home. Know your non-negotiables first, then build around them, not the other way around.

3. Reserves aren’t optional, they’re necessary. A district with no fund balance is one bad year from a crisis. A household with no cushion is one car repair from the same thing. Boring but, I treat it like a personal challenge. Whatever you need to do to make putting some money aside, learn it now and it becomes more of a habit later.

4. Small leaks sink big budgets. Nobody blows a district budget on one dramatic purchase. It’s the slow accumulation of small, unreviewed costs. Sound familiar? Check your subscriptions. You might be surprised by what you save, are you really watching that TV network? Do you need to keep paying for a gym membership you aren’t using? These were some of the choices I have made.

5. “We’ve always done it this way” is not a financial strategy. Some of the best moves I’ve made were questioning line items nobody had looked at in years, just because that’s how it had always been. Do the same audit on your own spending. You’ll find something. Is it time to look at a new car insurance carrier? I know it’s comfortable. Getting things done is uncomfortable.

Desire

If number three landed for you, the way it lands for most people, that’s the one book I’d hand you before any of the others. Profit First by Mike Michalowicz isn’t written for a school district, it’s written for small businesses, but the core idea, pay yourself and your reserves first and build everything else around what’s left, works at any scale. It’s the closest thing to how I think about fund balance, just with fewer board meetings.

Action

Pick one of these five and actually do it this week. Not all five. One. Real change starts smaller than people want it to. It’s going to take a little time.

Shop this month’s Work & Career book club picks →

FAQ

What personal finance lessons can I learn from how businesses budget?
The big one: pay your reserves first, then build spending around what’s left. Businesses that skip this run out of cushion fast. Households are no different.

How much should I keep in an emergency fund?
That depends on your situation, but the mindset matters more than the exact number at first: treat your reserve as a fixed cost, not a leftover, the same way a well-run budget treats fund balance.

What’s an easy way to find hidden expenses in my budget?
Pull your last three months of statements and circle anything you forgot you were paying for. Subscriptions and memberships are the usual culprits.

Read next: What I Wish I Knew Climbing from Accounts Payable to CFO