Run your Household like a Business

If every household ran itself like a business, America would be a different place. The ultimate purpose of a business is to maximize profits for its owners or stakeholders while maintaining corporate social responsibility. Your family is the stakeholders and your business is your trading of time for income to generate security and profits for your family.

You as the executive of your household have the responsibility to act in the best financial interest of your stakeholders (family). You also have the responsibility to do so in a socially responsible way by understanding and following the laws and regulations.

If your household were to be split up into 100,000 shares, how much would each share be worth? Would it be worth investing in for the long-term?

Let’s apply what I learned during my Master’s of Business and Administration degree (MBA).

What Makes Businesses Successful?

For the purposes of our thought experiment, I’m going to only talk to the aspects of a successful business that relate to the running of a successful household.

A successful business understands the need to continuously improve their processes. The need to become more productive and efficient and to be agile enough to quickly respond to changes in the market.

A successful business produces value to its customers and in return generates income. It works to drive down overhead and the costs of operations in order to increase its profit margin.

A successful business manages debt and utilizes leverage when appropriate to drive future growth and profits.

How does this relate to a household?

Kayla and I recognize the need to continuously improve our household. We aim to reduce expenses by cutting debt and necessary expenses. We operate our household with a lean management style. We aim to save more by implementing a zero-based-budget and only utilize debt as a tool when most appropriate.

Business Basics

The topics below will provide a framework of basic business knowledge that you can apply to your own household.

Running your household like a business:

  1. Strategic Management

  2. Operations Management

  3. Strategic Financial Management

  4. Human Capital Management

  5. Basic Accounting

  6. Marketing

  7. Savings Rate

Strategic Management

Strategic management involves setting goals, analyzing your capability in achieving those goals, evaluating strategies to accomplish those goals, and ensuring that you implement the strategies across your household.

Operations Management

Operations management is the utilization of business practices to maximize profits. This is done by creating the highest level of efficiency possible within your household. This includes improving your savings rate, avoiding/reducing debt, and having a consistent investment strategy.

Strategic Financial Management

Strategic financial management is about creating profit for the household and ensuring an acceptable return on investment (ROI). Financial management is accomplished through planning, setting up budgets, and managing risk through diversification.

Human Capital Management

Human Capital Management (HCM) is the comprehensive set of an organization's practices for managing, developing, and optimizing you and your partner to maximize your value to the household. A good example is my wife earning her Master’s in Curriculum and Instruction to earn a pay raise as a teacher. This is when a college degree is “worth it.”

Basic Accounting

Basic accounting is necessary to ensure that you are retaining an important financial record of your income and spending. Create a budget that is less than the expected income for the upcoming month. In doing so, you free up capital (cash) to put towards savings and investments. Fueling the growth of your household.


How are you and your spouse marketing yourself? Is your LinkedIn up to date and competitive? If you're not putting your best foot forward, you could be missing out on job opportunities that could lead to increased income. You need to be your own best advocate and constantly looking for opportunities to learn, grow, and ultimately increase your income.

It’s also keeping your social media profiles clean and free of imagery that is less than savory. If Kayla (a teacher), posts images of her partying and getting crazy, that probably will reduce her professional employment opportunities in the future. How are you representing yourself and your household?

Savings Rate

Your savings rate is the difference between your income and expenses. If your household income is $10,000 per month and spends $7,000 per month, your savings rate is 30%. It’s this amount of money that you can put to work to generate wealth for your household via paying down debt, absorbing financial emergencies, and investing.

Who’s the CEO, COO, CFO of your Household?

In our household, I’m the self-described visionary CEO. I am the one who spends time dreaming, setting goals, generating ideas, and giving direction to Kayla.

Kayla is 100% the COO of our household. She keeps us organized, corrects, and checks my ideas constantly and ultimately is the one who implements our strategy.

A major component of this strategy to run your household like a business involves combining your finances. I’m a huge believer in this for married couples for very obvious reasons.

None of our decisions are made in a vacuum. We’re in constant communication about our finances, strategies, and goals. Financial communication is the strongest aspect of our marriage and something I’m really proud of. I created the Money Marriage Checklist to help you achieve it as well.

Monthly, Quarterly and Annual Meetings

We try to sit down on a monthly basis to go over the budget for the upcoming month. Typically, I set the budget based on the prior month’s spending and cut a little more than I should. Kayla then reviews it and adds all the line items I overlooked like birthdays, holidays, kid’s clothes, special dinners, etc…

Quarterly we tend to look ahead at the next season or quarter and set short term financial goals. Right around our anniversary in December, we look towards the upcoming year and set more long term financial and household goals. We use our Goals Worksheet as a resource to put the goals on paper.


Once we began treating our household like a business things really started to click. Managing our income, expenses, and maximizing our efficiency has drastically improved our financial situation.

Financial communication is at the heart of running your household like a business. If you have a significant other, you need to be in constant communication with one another. If not, then you’re likely overlooking critical aspects of your business.

This may not be the perfect strategy for every family, but it has certainly taken our family to another level. I truly hope it helps you.

FIRE worksheets & budgeting course

    We’d love to hear from you! Please leave a comment below.