The primary goal of financial management is to develop an efficient, balanced, and profitable financial system that supports your personal and business goals. It is your responsibility to ensure that your financial goals are met and that your financial system is working for you.
With that, there are two key aspects that must be addressed in any financial plan or system: capital allocation and risk management. Capital spending is the most important aspect of any financial plan because it involves how much you’re spending and how much you’re saving. There are two key approaches to capital allocation: “hard caps” and “soft caps”.
The two main approaches to capital allocation, hard caps and soft caps, are both very popular, and both are used by virtually every business and individual that uses a financial system. The difference between them is that a hard cap is a set goal, while a soft cap is a per-person or per-year cap. Each approach is different, so it’s important to know when to use which one.
Hard caps, which are set goals, are often used to set up your accounts in the first place. With a hard cap, you limit what you can spend so that you can’t spend more than you have, which is the opposite of a soft cap. A hard cap also sets the bar for saving, so a hard cap means you have no room to save if you have a lot of expenses.
It seems like the big issue in this story is that the people who are in charge of your finances (and thus the budget) are your friends, and I think it’s very likely you’re not that close to a friend, but it’s likely that you’re not that close to someone who actually has access to your finances and your financial resources.
I think one of the most important things that financial management is to think critically about how you are spending money. You might not think it, but you should.
This is the first chapter of a four-part book called “The Financial Management Handbook”. The book is meant for those who are just beginning their financial management. In this chapter, it explains the three primary aspects of financial management and the three primary types of debts. It also covers the difference between capital and non-capital debt and explains what credit is, how it’s used, and who it benefits.
In the end, it all comes down to being true to your values. You can’t live in the world that you’ve created if you don’t make sure you are honoring your own values.
Financial management is a journey, not a destination. Your values matter. So does your financial management, so do your values. For us, this means that we don’t just focus on what we think or feel that “should” be done. We also have to think about what we think or feel that “doesn’t matter”. And that brings us to the next part, the chapter title.