For thousands of American families, the call to arms was sudden -- so sudden, in fact, that there was little time to take care of business affairs. In many cases the "chief financial officer" -- the person in charge of the family's finances -- found himself or herself in a Mideastern desert in a matter of days.
Therein lies a lesson, whether you're a soldier or not. No matter how adept you are at managing your family's finances, someone else always should be aware of your financial picture and investment goals, your debts, your assets and the like -- someone who can act in your behalf in the sudden event you cannot.
In most families, it might be enough for husband and wife to be aware of the monthly budget, the income to be expected and the bills to be paid, the savings plan. That would be enough, in any case, to keep the home fires burning until the problem can be sorted out.
It probably wouldn't be enough in the case of a family with a portfolio of shares of stocks, bonds, cash and perhaps mutual funds. While it makes no sense to move money continually from one place to another, a wise investor is prepared to reallocate assets as conditions change, to abandon a weak position or to take advantage of bargains.
You can't do that, however, if you have become debilitated or are otherwise out of touch with your advisers. That's why you need a surrogate investment manager. Assuming no family discord, a financial power of attorney could go to your spouse. Yet, it makes good sense to retain an informed outside professional who can keep an eye on your financial affairs when you cannot, advising and counseling your surrogate. The dilemma of some reservists called up for duty in the Persian Gulf suggests that you should make these arrangements before the crisis strikes.
"Any person who cares about investment performance ought to have a written investment policy statement to guide the spouse or adviser who will act on his or her behalf," says Roy C. Ballentine, a chartered financial consultant of Wolfeboro, N.H. "If all you have is in mutual funds, don't leave it to a broker or banker to select between funds."
"Don't wait until you have a problem to retain a financial planner," advises F. Daniel Bell of Wyrick, Robbins, Yates & Ponton, of Raleigh, N.C. An attorney and consumer representative for the National Association of Personal Financial Planners, Bell points out that a financial planner can provide a valuable service in preparing you for the future.
What might prompt you to seek advice? You have acquired some wealth, possibly by inheritance, regardless of your age. You have established yourself at the beginning of a career. You have learned that you are a saver, not a spender. You are thinking about your future -- marriage, buying a house, children and their education, building retirement income.
"You should have at least an initial consultation with a financial planner," says Bell. "There's a perception out there that financial planners are only for the wealthy. Yet, the financial planning community is reaching out to the middle class, and its services are now available on a cost-effective basis. Never assume that you are earning too little to justify seeking advice."
Ballentine has some advice just for reservists: your surrogate financial manager should be your spouse, supported by a financial planner if you feel the need. It doesn't make any sense for a reservist to load up on life insurance because of its contestability and because of the war clauses in the policies. Paying bills is best left to a family member. You can worry about paying taxes later; if you are serving in the Gulf War, your filing is deferred.