Why Financial Management Is Important

One of the most important factors of surviving in this world is money. Without it, you wouldn’t be able to obtain the necessities of life. The task of personal financial management is the key element to getting and keeping money. Personal financial management is essential because it helps prepare for your future, saves money, and it gives you control over your money. Primarily, financial management helps you prepare for your future. People must know that in life, the unexpected happens. It is best that you plan for the unexpected so that when it occurs you are ready. Financial management provides a safety net for those that are prepared. For example, a friend of mine, who is a doctor, got into a cataclysmic car accident. He never thought that he would be the one actually in the hospital bed. Luckily, he took $150 out of each pay check he received for 5 years so that he could have it if an emergency ever occurred. When he was presented with the amount of money he owed the hospital, he was able to pay for it without a problem. As Dave Ramsey would say, you need a “Rainy Day Fund” and I believe that financial management provides people the opportunity to have one. Conjointly, financial management helps you save money. Saving your money leaves you with money that could be used for vacations or could be used for donations. It could even be used to pay off a debt you owe, such as student loans. It is important that you have some amount of money saved. If you spend every cent of what you make, you would never make a dollar. It is crucial for the young to start saving now because federal funds, such as social security, might not exist by the time they reach age 65. Dave Ramsey once stated “Live like no one else so that later you can live like no one else.” This quote means that you need to make sacrifices so that you are able to save. Once you save enough, you will be able to live beyond your means. Financial management is vital in completing this process.