I am here again with another discussion on a topic that I had in the Heart 2 Heart Community Hangout on the Hive Learners Discord Server. We had a discussion about "Financial Management" and here are my thoughts on this.

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When we say the term financial management, what actually comes to mind?

For me, finances and money come first to mind, and with the word management, the word planning comes to mind. So financial management would definitely mean how we plan our money. It extends to knowing how money flows in and out of your account and making sure it is balanced.

In simple terms, this means proper management of funds...

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𝔗𝔥𝔢 𝔦𝔪𝔭𝔬𝔯𝔱𝔞𝔫𝔠𝔢 𝔬𝔣 𝔣𝔦𝔫𝔞𝔫𝔠𝔦𝔞𝔩 𝔪𝔞𝔫𝔞𝔤𝔢𝔪𝔢𝔫t

Financial Management is important to the lives of every individual and also to the lives of every organisation because it brings about financial stability, growth, and profitability.

Personally, I know someone who has proper financial management and knows how to make good decisions regarding money, especially when it comes to matters like taking risks and impulse spending. Many people who do not know how to manage their money are always custodians of impulse spending. I would not say I am immune, but I am working on it.

Financial management does not only cover saving your money but also reaches the aspects of investing, budgeting, and every aspect that concerns financial planning, whether it is planning to pay school or even for taxes and debts.

With a proper understanding of your finances, you can easily achieve your financial goals. You would be able to save money and direct money where it needs to be. This also goes as far as having an in-depth understanding of your needs and wants.

With that, it would be possible to leave within your means. Since you know the amount of money that comes in and goes out, it would be very possible for you to not spend on things that are beyond your means. You therefore cut your clothes according to the size of the material you have, not really according to your size, because your size can even be bigger than what is at hand.

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𝔗𝔥𝔢 𝔠𝔥𝔞𝔩𝔩𝔢𝔫𝔤𝔢𝔰 𝔭𝔢𝔬𝔭𝔩𝔢 𝔣𝔞𝔠𝔢 𝔦𝔫 𝔣𝔦𝔫𝔞𝔫𝔠𝔦𝔞𝔩 𝔪𝔞𝔫𝔞𝔤𝔢𝔪𝔢𝔫𝔱

Knowing how to manage your finances is not easy, and people face a lot of challenges with managing their money, and one of the reasons is that they lack financial education.

A lot of people do not understand or know the importance of saving and investing, nor do they know about budgeting and managing debt. You would see most people living in a lot of debt with no plan on how to pay up their debt. This is because they are not away and possibly lack financial education.

Aside from that, planning one's finances is time-consuming, especially when one does not know how to go about it. It can end up being confusing or even frustrating. For someone who has a busy job, it would be difficult to find the time to properly plan his or her finances.

Everyone faces the temptation to spend more than they earn. It is not that we do it intentionally, but our day-to-day activities come with expenditures on things we feel we want and may not even need. At the end of the month, we would see that we had spent more than we earned and may have ended up borrowing to get the things we finally needed.

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𝖳𝗂𝗉𝗌 𝖺𝗇𝖽 𝗌𝗍𝗋𝖺𝗍𝖾𝗀𝗂𝖾𝗌 𝖿𝗈𝗋 𝖾𝖿𝖿𝖾𝖼𝗍𝗂𝗏𝖾 𝖥𝗂𝗇𝖺𝗇𝖼𝗂𝖺𝗅 𝖬𝖺𝗇𝖺𝗀𝖾𝗆𝖾𝗇𝗍

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To have effective financial management, it is important to make it a priority to create time to go through your finances and monitor your spending. This would help you make good decisions concerning how you spend.

After you have begun to create time to monitor your spending, creating financial goals would be the next step to building your finances. Make plans for what you want to do with your money. How do you want your money to grow? What asset do you want to acquire? Then plan on how to achieve those goals.

Begin to invest wisely in these goals you have laid down. Don't invest in things you have no knowledge about. It is important to do your own research before putting your money into any investment.

If you have debts, then make sure to pay them off as quickly as possible and avoid high-interest loans. If you want to borrow money, it is best to borrow from a friend or a family member, as this would save you from paying extra or even higher interest.

Emergency funds are critical; they are similar to savings, but they are designed to protect you from unexpected events. When life happens unexpectedly, and these funds are there to save the day. It is advisable to always set aside emergency funds, no matter how small they may be.