Common Financial Concerns

Common Financial Concerns

5 Common Financial Concerns

Many of us take for granted how quickly the modern lifestyle seems to come and go. In a year, we might plan out what our next Christmas will look like. In a lifetime, we’ll probably never think about our finances at all, let alone plan them out in advance. It’s easy to get caught up in the whirlwind of life and forget that these are major concerns. If you’re not careful, they will catch up with you. It’s when they do catch up to you that things become complicated.

Common Concerns People Might Have

Financial concerns are common, whether you are a young adult or an old person. It doesn’t matter how much money you make, or if you have trouble affording certain things or can’t pay your bills. You need to keep in mind that managing your finances isn’t just about having enough, it’s about how you’re going to spend what you do have.

According to Dr. Jordan Sudberg, these common financial concerns are just a few things you should make yourself aware of so you can have good habits and avoid potential pitfalls in your life.

1. Poor Credit

If you have poor credit, it is going to be a major concern for you. You may be denied loans that you want, or have to pay higher interest rates on those loans than you should have. You could also find that it is more difficult to rent an apartment or a place in the city.

2. Debt

Many people find themselves with credit card debt, or other forms of debt. This can be especially hard to manage, as you are paying interest on it. It can also be an obstacle to receiving loans such as a mortgage. If you have college student loans, they may affect what you can do with your savings, or how much you’ll make when you’re in the workforce.

3. No Savings

If you do not have any savings, this can be a cause for concern. If something devastating happens to you or your family, such as a sudden illness or car breakdown, the lack of savings could prove to be devastating. The issue here is that you may need to make an immediate purchase of an item that cannot wait until things start to settle down. You’ll need to fill in the gap with credit cards or other types of loans. This is how many people find themselves in financial trouble.

4. A Lack Of Insurance

This could be a major concern to you, especially if you have children. You might not be able to afford the type of insurance that would cover the cost of their health care if they were to get sick. You may also not have enough money to pay for their college education or help with a down payment on a house.

5. Retirement

If you are not properly invested for your retirement, this will be a concern. Retirement is going to be important someday, and if you haven’t prepared for it, it could really hurt you down the road. You may not have enough money to live comfortably when your career comes to an end.

How To Avoid These Concerns

The best way to avoid these concerns is to plan ahead and to anticipate problems that might eventually come up in your life. This will help you avoid them or work through them when they come up. As Dr. Jordan Sudberg points out, proper planning is going to help you avoid many of these concerns.

Financial vs. Strategic Management

Financial vs. Strategic Management

Financial vs. Strategic Management

Any organization needs to identify its direction to succeed in its field. Here is where financial and strategic management comes in handy. Strategic management entails recognizing where stakeholders want a business to be in the future and then implementing strategies to reach there. However, it is hard to achieve this objective without sufficient financial resources. On the other hand, financial management involves linking its financial operations with its strategic plan. Merely put, strategic management shapes vision, while financial management shapes how to use financial resources to accomplish these goals.

An Overview of Financial Management

According to Alexander Djerassi, financial management is managing funds; it shows the cash inflows and outflows within a particular period. Businesses incorporate financial management into their operations to accomplish the much-needed financial goals.

Most companies have a separate financial department that plans for financial activities. This department is mainly responsible for handling various financial statements like cash flow statements, balance sheets, and income statements at the end of a given period. It is worth noting that organizations refer to these statements when preparing budgets.

Any financial management plan in a company should include budgeting, which is a predefined estimate for the future. A business can prepare several types of budgets like production, sales, cash, and more. Usually, a budget is prepared with regard to the previous year’s business performance. Regardless of a company’s size, budgeting is beneficial for future planning.

An Overview of Strategic Management

Due to the competitive nature of the present businesses, organizations need to have strategic management plans at their disposal to survive. Alexander Djerassi says that the main objective of strategic management is to outline the vision or direction of a business. The crucial thing about any business is that it needs to align resources with goals.

Strategic management offers the following:

  • A game plan for satisfying consumers
  • A road map for the organization to have a competitive advantage over its rivals
  • A formula for achieving long-term incredible marketplace performances
  • A prescription for carrying out business

Strategic management is seen as a step-by-step process. The first step involves creating a strategic vision that defines the company’s ultimate goal. The vision explains how the business sets its financial and strategic goals. The second step is to develop a strategy that allows the company to attain the stated vision and goals and then implement it. Next, monitoring is put in place to assess the performance and enact the essential alterations. The final stage is to revise the process, if need be, according to the prevailing conditions.

Overall, strategic management is simply a company management activity used to outline priorities, get the anticipated results, strengthen the operations, ensure that stakeholders and employees work towards a common objective, and allow the company to focus on resources and energy.

Differences Between Financial and Strategic Management

  • Strategic management offers the direction towards attaining strategic goals while financial management outlines how to attain financial goals
  • Strategic management is needed to align a company’s resources with its ultimate goals, while a financial management is needed to handle the company’s cash flows