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What is Financial Management? | Integrated Planning Video Series

October 14, 2022

Prudent financial planning has never been more important than it is now. In our recent six-part Integrated Advisory video series, WealthCo President, Sophie Blais, takes us through the key elements of financial planning. The first video digs into the fundamental components of financial management, and we’ve included a synopsis below. 

Did you know that there are two sides to financial planning? There is a quantitative side and a qualitative side. On one side is the quantitative side, which deals with numbers and calculations. This is the side of financial planning that deals with budgeting, asset allocation, and risk management. On the other side is the qualitative side, which deals with emotions and behaviors. This is the side of financial planning that deals with goal setting, decision making, and psychology. Both sides are equally important in achieving financial success.

Here, we will dig into best financial management practices, focused on four core areas: net worth, cash flow, savings, and debt.

Net worth

There are a couple of areas of financial management that are really important. The first one is your net worth. We often say that your net worth is your scorecard. Oftentimes people look at how much money they make, how much money they save. But what really matters in the long term, is what you keep and how that grows. 

On the asset side, you'll often see things like homes, properties, vehicles, jewelry, cash, and investments.

On the liability side, that’s where you’ll find the mortgage on your home or any properties, any loans you might have owing, and credit card debt. 

To come up with your net worth, you take your assets, minus your liabilities and there you have it. 

Cash flow

Another thing to keep in mind as you're working through financial management is cash flow, money in and money out. Cash flow is an important discussion because what you make and what you spend have a huge impact on the planning opportunities and discussions that you might have. And this is where budgeting comes in.

People tend to either have a love or a hate relationship with the concept of budgeting. But budgeting is really important for most individuals and our businesses in terms of knowing what's coming in, when is it coming in, what needs to go out? And then effectively it allows you to make sure that you put yourself first. 


There's a concept that is important to understand, and that's the idea of paying ourselves first. Making sure that there is money set aside on a regular basis to meet your needs. We often suggest to clients that they do look to paying themselves first and create a habit around putting money away for the future. That’s a tough thing to do in today's day and age, because we like that immediate satisfaction. But creating the habit, creating the discipline to put money aside, is really important and will serve you well. 


Nobody likes to talk about debt, but it’s a really important topic to discuss and to look at. Here are a few core tips about debt and what you should do with your debt:

  • Pay down your highest interest first;
  • Explore whether you can consolidate your debt – there are a lot of consolidation programs out there;
  • Think about your mortgage right.

When looking at debt, there are good and bad types of debt. Credit card debt equals bad debt; mortgage debt equals good debt, as it's ultimately going to build up your net worth.

If there is one message to takeaway from this series, it is this: it’s never too early or too late to work with a financial advisor in an integrated team to make sure that you can live the best life you want to live.