Is it enough to just understand financial management?

[Bluedrem]

For financial security, money management is also important along with earning money. People earn money and spend it, but unplanned spending can make people poor, so every person should develop the habit of spending in line with their income. And from this concept, the issue of money management basically comes to the fore. That is, how a person earns money, how much money he will use in which sector and how much money he will spend in which sector, these things are basically determined by money management.

[Ishicryptic]

It's a good point you understand financial management, but simply understanding without good application remains pointless at the end of the day.

I have encountered people who were good in giving financial advices. They've told how to invest, where to do it and how much can be put at risk. But I've seen them when being asked what are their investments, they can't answer that. It's all theoretical to them and they can't apply it to themselves. They're like teachers in good faith but they can't apply it to their lives. So, that's true that it is going to be pointless if after learning financial management and you don't apply it to yourself. You'll be good in life advises but can't actually do it in your own.

They are like schoolteachers who will be guiding us from the textbooks only and will have very less or no real-world knowledge. These people might be able to read a couple of books every day and attend a few wealth management lectures or seminars which makes them feel confident that they will be able to guide others. They get so busy in guiding others that they almost forget about their own wealth management.

They will still struggle at the end of the day even after giving million-dollar opinions to others. Is trusting and taking guidance from these people really worth? I don't think so. We can instead learn from someone who has real-world experiences and has spent couple of years struggling at the initial stage because only then they will be able to learn the hard lessons taught by life.

It is fine to learn from anyone who is making sense about how to plan finance and apply it practically but if you want to investigate whether they are actually being financially disciplined in practical you might be disappointed. Some people are gifted at lecturing or preaching but it doesn't mean that they have the discipline and stamina to practice what they teach so the point is that we shouldn't have high expectations regarding how far lecturers and preachers practice what they teach. Learn everyday from people and materials then take what you believe will benefit you and practicalize it, don't worry if those that thought the lessons are perfect at what they teach.

Every adult knows good and bad and if all of us choose to practice only good things there won't be any bad in the world but some people know what is good but choose to do bad. In the same sense most people understand financial management but lacks the willpower to practicalize it.

[Cgrexp]

For financial security, money management is also important along with earning money. People earn money and spend it, but unplanned spending can make people poor, so every person should develop the habit of spending in line with their income. And from this concept, the issue of money management basically comes to the fore. That is, how a person earns money, how much money he will use in which sector and how much money he will spend in which sector, these things are basically determined by money management.

In financial management, it is necessary to have the ability to make conscious decisions. If there is no ability to make conscious decisions, then it is necessary to be aware of how much money a person is earning and based on that, how much he is able to spend on necessary expenses and save for the future to determine the budget in these areas. Financial planning or management does not mean that you have to reduce your expenses, but rather how much money should be used in which sectors, this is planned through financial management. Own income, expenses, investments, savings are all part of financial management.

[WaySummit]

You're absolutely right; in financial management, application and discipline are just as critical as knowledge.

[pawanjain]

I know we can learn financial management through management courses or we can learn informally through our experiences or common sense. But applying financial management skills is by choice, it's not enough to know how to plan your finances and how to make feasible budgets for it, what matters is applying it. What you know doesn't matter so much as what you do with it, knowing that you should live bellow your means (earnings) yet you spend everything is poor management. Without discipline you cannot save and invest, no matter how much you earn you can blow everything if you don't have focus.

Financial management centeres on having budget for your total income, what is not in the budget is either carried forward or cancelled. Budget helps you to spend within your planned expenditures, if you must add something to your expenses outside of your budget it means that you have to remove something from your budget. You need to priotize your needs to know what will go into what you earn and what doesn't, it helps you to spend prudently. Yet knowing all this things is just theory if you don't have the self control to practicalize them, you need to be very disciplined about financial matters if you must succeed financially.

You are absolutely correct on this. We definitely need to have the discipline and self control to control our expenses.
Our spending habits are what determines our future. Living below your means, as you say, is one of the ways to maintain your wealth.
I have been following the same thing since I started earning and so far it has been working out great for me.
But lately, my expenses have started piling up due to which I am unable to make any extra savings.
I don't regret though because none of those expenses are something that I can avoid.
It's just that I will have to sort out the next few months by doing no extra expenses than my monthly budget.

[Fredomago]

For financial security, money management is also important along with earning money. People earn money and spend it, but unplanned spending can make people poor, so every person should develop the habit of spending in line with their income. And from this concept, the issue of money management basically comes to the fore. That is, how a person earns money, how much money he will use in which sector and how much money he will spend in which sector, these things are basically determined by money management.

In financial management, it is necessary to have the ability to make conscious decisions. If there is no ability to make conscious decisions, then it is necessary to be aware of how much money a person is earning and based on that, how much he is able to spend on necessary expenses and save for the future to determine the budget in these areas. Financial planning or management does not mean that you have to reduce your expenses, but rather how much money should be used in which sectors, this is planned through financial management. Own income, expenses, investments, savings are all part of financial management.

You need to balance everything for you to secure your finances, similar to what you said addressing what you need to fill and cover is very important, it will give you the idea if how you'll going to spend your salary, and the good thing if ever that you have extra source of income, knowing those expenses will give you good hint to budget your salary for your needs, savings and investments.

[barbara44]

For financial security, money management is also important along with earning money. People earn money and spend it, but unplanned spending can make people poor, so every person should develop the habit of spending in line with their income. And from this concept, the issue of money management basically comes to the fore. That is, how a person earns money, how much money he will use in which sector and how much money he will spend in which sector, these things are basically determined by money management.

Yeah, you can separate many things and find where your money went, and that way try to make sure you can set a realistic budget, the unexpected parts is the problem that you can't really do great. Investment is the same, there are many diversification suggestions for example, never more than 5% for a single stock, never more than 20% in a single sector and those are good if you are some wall street company but when it comes to retail investors they do not really mean anything.

I would suggest that people who are not that wealthy, should do whatever works best for them and it will definitely end up with them getting richer thanks to all of this, it is not going to be that much of a big problem at all.

[Emjay24]

As a person, I believe you cannot claim to have understood anything if you have not practicalized it, make some mistakes and learned from them. Theory is easy, almost everyone knows the theory of financial literacy but you don't see them acting in that regard because it is one thing to know it and another thing to apply it efficiently.

Good understanding of financial management should be a testimony of a long-term application of financial management principles, you cannot claim to fully understand something you never experimented, head knowledge alone is flawed, experiences is the best way to validate knowledge.

[Bluedrem]

In financial management, it is necessary to have the ability to make conscious decisions. If there is no ability to make conscious decisions, then it is necessary to be aware of how much money a person is earning and based on that, how much he is able to spend on necessary expenses and save for the future to determine the budget in these areas. Financial planning or management does not mean that you have to reduce your expenses, but rather how much money should be used in which sectors, this is planned through financial management. Own income, expenses, investments, savings are all part of financial management.

That is why people basically have to set a goal for progress and if people work according to that goal then that person can reach the peak of progress. Then a person will move towards a specific goal or goal, perhaps he will go through a moderate and correct management. And when a person goes through discipline and correct management, he will be able to manage everything in an orderly manner, he will then understand where his earned money needs to be spent in which sector and how much. And only then will that person be able to bring his financial prosperity through correct financial management.

[HONDACD125]

As a person, I believe you cannot claim to have understood anything if you have not practicalized it, make some mistakes and learned from them. Theory is easy, almost everyone knows the theory of financial literacy but you don't see them acting in that regard because it is one thing to know it and another thing to apply it efficiently.

Good understanding of financial management should be a testimony of a long-term application of financial management principles, you cannot claim to fully understand something you never experimented, head knowledge alone is flawed, experiences is the best way to validate knowledge.

I agree, even though one doesn't specifically need to make mistakes to learn, it's important for one to at least implement what they've learned so that they can gain a better understanding of it, because as they say, practice makes a man perfect, which means that even if you have learned something, you will only become perfect in that thing, or at least have some level of perfection, if you practice that thing usually, which then makes you understand what you should and what you shouldn't do because you will understand what's right and what's wrong in regards to that thing.

When it comes to financial literacy or financial management, it's actually quite difficult to have a complete grip over that, and this is the reason why so many people make so much money but still can't have a better life or enough savings, because they are bad at managing their finances, which is why even though they make a lot of money, they spend it in such a way that doesn't allow them to have savings, or build something for their future. When you learn and practice financial management, no matter how much money you make, it will be easier for you to manage it.

[Juicyhome]

Financial management is easy on paper but not that easy on practice because you need to be disciplined and make sure that you don't spend more than your budget. Everyone that want to be successful in future needs to have a good financial management so that he can put his resources in the right place at the right time. Investing is part of what will make you understand how to manage your cash inflow properly. A person who lacks good financial management would find it difficult to achieve his financial goals.

Yeah,  we're very good in getting new knowledge on paper and in writing but we don't practice it, we're like preacher that preaches love and peace but he has case in court.  Having any type of knowledge without application is zero. The Value of any knowledge is the ability to use it to better one's life, if the knowledge is not shown in your lifestyle then it's a waste.

Having a financial knowledge is very good skill but using it to better your financial life is more profitable then just knowing it. Finance is very important in our life because we spend everyday and we also generate income daily, having a financial knowledge on how to manage your income and in flow will help you to achieve so many goals in life.

[Akbarkoe]

As a person, I believe you cannot claim to have understood anything if you have not practicalized it, make some mistakes and learned from them. Theory is easy, almost everyone knows the theory of financial literacy but you don't see them acting in that regard because it is one thing to know it and another thing to apply it efficiently.

Good understanding of financial management should be a testimony of a long-term application of financial management principles, you cannot claim to fully understand something you never experimented, head knowledge alone is flawed, experiences is the best way to validate knowledge.

Of course, if you only understand the theory but don't implement it, it will just be wasted knowledge. Implementation is very important because that means you can have experience and know how financial management works and validate a money management theory. This is related, but what is certain is that you have to have the money so that there is money that can be managed well from it. If you don't have the money, then why understand it, right?

[ChocolateBitcoinK]

As a person, I believe you cannot claim to have understood anything if you have not practicalized it, make some mistakes and learned from them. Theory is easy, almost everyone knows the theory of financial literacy but you don't see them acting in that regard because it is one thing to know it and another thing to apply it efficiently.

Good understanding of financial management should be a testimony of a long-term application of financial management principles, you cannot claim to fully understand something you never experimented, head knowledge alone is flawed, experiences is the best way to validate knowledge.

I agree, even though one doesn't specifically need to make mistakes to learn, it's important for one to at least implement what they've learned so that they can gain a better understanding of it, because as they say, practice makes a man perfect, which means that even if you have learned something, you will only become perfect in that thing, or at least have some level of perfection, if you practice that thing usually, which then makes you understand what you should and what you shouldn't do because you will understand what's right and what's wrong in regards to that thing.

When it comes to financial literacy or financial management, it's actually quite difficult to have a complete grip over that, and this is the reason why so many people make so much money but still can't have a better life or enough savings, because they are bad at managing their finances, which is why even though they make a lot of money, they spend it in such a way that doesn't allow them to have savings, or build something for their future. When you learn and practice financial management, no matter how much money you make, it will be easier for you to manage it.

Investment or financial planning management work can be done through practice rather than theoretical knowledge. However, I am not saying that theoretical knowledge is not necessary. It is more effective when a person learns through practical practice along with gaining knowledge. There are many people who earn high income but cannot develop wealth due to lack of planning or control or they spend more money in some places and create a shortage of money in some places. Therefore, whether the income is small or large, there is a need for financial discipline. Financial security is ensured through a controlled system of money.

[BlackBaron]

You need to balance everything for you to secure your finances, similar to what you said addressing what you need to fill and cover is very important, it will give you the idea if how you'll going to spend your salary, and the good thing if ever that you have extra source of income, knowing those expenses will give you good hint to budget your salary for your needs, savings and investments.

Knowing how much money we will spend each month is crucial. This will give us an idea of ​​whether our income is sufficient to cover it all. This shouldn't be difficult, as we already know what we need each month, including the bills we have to pay.

This will help us outline our plans for the remaining income, for emergency funds, investments, and so on. This will simplify our financial situation. And even if we have unexpected expenses, having planned everything will be a breeze.

[batang_bitcoin]

You need to balance everything for you to secure your finances, similar to what you said addressing what you need to fill and cover is very important, it will give you the idea if how you'll going to spend your salary, and the good thing if ever that you have extra source of income, knowing those expenses will give you good hint to budget your salary for your needs, savings and investments.

I agree, balancing your finances is needed to secure your needs and at least have some money for investing and saving. But I think most people are doing their best with their finances and the problem lies on the amount that they have to budget. There's nothing left to invest and save when the salary they have is already enough to cover all of the expenses. So it still leads to the need of having more source of income so that there's more to budget and allot to savings and investments that someone needs to have if they want to.

[RockBell]

For financial security, money management is also important along with earning money. People earn money and spend it, but unplanned spending can make people poor, so every person should develop the habit of spending in line with their income. And from this concept, the issue of money management basically comes to the fore. That is, how a person earns money, how much money he will use in which sector and how much money he will spend in which sector, these things are basically determined by money management.

For the sake of regret you just have to find a way of managing your money properly and when you are earning you have to learn to manage your resources well because when it comes to money a lot of things can happen so it matters a lot when you go with having a budget in everything that you do, a lot of people have lost there money because they did not manage there resources well and there is just to many expenses but even at that the way you spend can actually be managed properly and you can also fix on your self the amount of money you want to be spending and it is all about discipline when you discipline yourself properly then issues like this can be addressed better and there ways a lot of things can be addressed, you don't buy what you don't need and many others.

[junder]

You need to balance everything for you to secure your finances, similar to what you said addressing what you need to fill and cover is very important, it will give you the idea if how you'll going to spend your salary, and the good thing if ever that you have extra source of income, knowing those expenses will give you good hint to budget your salary for your needs, savings and investments.

One of them is that we must be able to distinguish between what is needed and what is wanted. Some people today, especially young people, tend to prioritize only their desires.

An example I can draw from my own environment is that many young people, both those who are employed and those who are not, still insist on getting what they want, such as the latest smartphone.

It makes sense for those who have jobs, but what upsets me is that I know some who don't have jobs or income, yet they still insist on getting what they want, even to the point of getting into debt or taking out online loans.

[Pablo-wood]

Yet knowing all this things is just theory if you don't have the self control to practicalize them, you need to be very disciplined about financial matters if you must succeed financially.

The same theory we learn from formal education. Financial management is more of practical than theory and it can only be adapted into and not taught. Just as mentioned it takes discipline and commitment to manage our finances mostly in today's world where peer pressure and high standard of living has become the order of the day. It takes someone who doesn't live their lives to impress others to grow into that maturity of financial management.

But the sad reality is our expenses keep increasing daily, both the planned and unplanned needs. Sometimes a problem bigger than our savings and investments might just arise and blow things out of proportion and we just have no choice but to adapt and tackle the needs of that moment. This where investment becomes more profitable because it will most likely give us something to fall back to at the end of the day

[beerlover]

As a person, I believe you cannot claim to have understood anything if you have not practicalized it, make some mistakes and learned from them. Theory is easy, almost everyone knows the theory of financial literacy but you don't see them acting in that regard because it is one thing to know it and another thing to apply it efficiently.

Good understanding of financial management should be a testimony of a long-term application of financial management principles, you cannot claim to fully understand something you never experimented, head knowledge alone is flawed, experiences is the best way to validate knowledge.

This is such an important aspect and yet there aren't really that much of a big deal when you think about it. Because no matter how much you "learn", without experience you are not going to do well and people miss that part of trading, because without proper trading or proper financial management, you will just have theory in your mind and not really know how it works.

And since money isn't vast for us and we do not have a ton of it, we can't just test many methods and see what we like, usually we have to stick to one and hope it works and if it fails we end up with waiting and accumulating some more for months until we can test again. So experience comes in handy, since it is not easy to gain experience in finance as a poor person.

[Creeper0]

Being educated about financial management and using financial management in real life are two different things. Gaining knowledge about financial management is very easy, but applying it in reality is very difficult. Unexpected expenses and high expenses against low income hinder a person from following financial management. However, if a person can create good financial management and accustom himself to that management, then his life will be comparatively easy even with low income.