There has always been an expressed emphasis on the Importance of knowledge with regards to financial education. Sufficient Idea on the essential details about the matter is a helpful tool as an individual paves his/her own way towards making transactions and earning profits. Not only businesses or large organizations are required to shape their minds for financial concerns, considering that individuals also have their own personal encounters that need application of their knowledge regarding finances. Financial education, in a real context, covers a wider range. This

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Is more than Just the study of money as It also tackles on concepts regarding financial management. This Is then actually the reason why Individuals and families are encouraged to understand this, provided that it serves as a guide in making significant decisions such as planning the budget, buying homes and the like (Organization for Economic Cooperation and Development, 2006). In this paper, we will learn how a regular subscriber of the magazine “Financial Times” will view matters such as personal financial capacity, capital gains, management of personal finances and key decisions that sellers should make before ling.

In order to further understand the abovementioned topics, we will also delve into a specific case of a farmer and his income. Through this procedure, we will be able to make associations of how finances must be managed in order to earn additional income. With all the points discussed, we can be able to determine and understand the role of financial education and management. Financial Management: Subscriber of Financial Times Financial management Is one of the most vital components of financial education, considering that it involves strategic administration of money.

In spite the common notion that financial management is more applied in an organizational level, it is also an essential aspect in helping individuals manage their finances. By definition, strategic financial management is referred to as “a defined sequence of steps that encompasses the full range of a company’s finances, from setting out objectives and Identifying resources, analyzing data and making financial decisions, to tracking the variance between actual and budgeted results and identifying the reason for this variance (Strategic Financial Management, 2014). From that idea alone, we can already be able to entail that financial management is all about knowing one’s own financial capacity, that is, the extent of personal financial resources. Nevertheless, financial management also purports to the concept of being able to weight out options and choosing one which is highly beneficial. In relation with how I perceive my situation as a regular subscriber of Financial Times, I believe that there is a need for me to consider the options laid out to me. Renewal of my subscription indeed involves an outflow of my asset, that is, cash.

And because there is a decrease in my personal assets, such action is considered an expense on my part. Although that is the case, I still need to ensure that my expense will be minimized in any possible way. Since a year of subscription requires an $775 because if I were to pay for the $420 this year, I still have to pay another $420 next year, assuming that the subscription price will not increase. That would all be $840, which is clearly a bigger amount than $775. Besides, choosing the two-year subscription is a safe action since I will not be able to pay any increase of the subscription price next year which is very possible to happen.

Financial management, as already mentioned, has a broad context as it also covers overall sub-concepts in both economic and non-economic fields of study. However, financial management involves cash management and financial planning which are evidently portrayed in my decision to choose the two-year subscription of $775. With my cost of capital of only 10%, it is indeed undeniable that I must form my personal financial plans so that I can budget my resources well. On a positive note, this action will also yield me an unrealized gain of $65 which is already a material amount.

Financial planning and cash management are all essential considerations of a business, given that both are aimed towards promotion and success of the organization. With that, it can be further acknowledged that understanding and application of the two – cash management and financial planning – will also gear an individual to properly plan and manage his/her assets and expenses. In that way, he/ she can still have money left to fund his/her other activities like investments in real estate and the like (Parisian & Sublimation, 2009).

From this viewpoint, we can further recognize that financial management is a vital part of our daily lives. Financial Management: Seller of Farmlands In any aspect, financial management has a role to play as long as the transaction involves money. In connection to the different concepts of financial management, it can be deemed that the most appropriate is the regard on the time value of money. This particular notion emphasizes the fact that the value of money changes from time to time.

This then explains why goods or commodities sometimes decline or increase in value, as they are also interdependent with the value of money during the period. In addition, another illustration that explains the concept is the increase of the principal amount deposited in a bank. The interest added to the principal amount is the change of money value over the period of time. More so, the activities that fall under financial management are also related with one another. These activities are: investing, financing and dividend policy (Fun, 2012).

In light with the case scenario, we can be able to determine that the farmer is particularly engaged in investing business, considering the efforts he had exerted to develop the farmland. In that sense, it is therefore suitable to identify his selling transaction as a part of financial management since he is also weighing out his options on whether he should sell the farmland now or next year while considering the amounts of money involved. Financial management entails an analysis of the value of money and with that, the farmer must place a high regard on the amount he will reap now.

The offer of the holder contract is $950,000 which is $50,000 less than the price he offered for next year. The farmer must then have to think whether the amount of $50,000 is material to him or not. From that starting point, he can be able to make a decision. In the most basic understanding, it is easier to say that the farmer must sell the considered that during that one year, the farmer must have to cultivate and develop the land and this action will result in several expenses. Will those expenses equal to $50,000?

Or will they be more than $50,000? Such questions must be asked so that the farmer will have a proper understanding of what the $50,000 difference will be compensated for. The one year wait of the farmer also entails other unexpected expenses and on a practical basis, it is clear that the $50,000 increase in the value of the farmland after a year is not enough to cover these expenses. For the second scenario, the farmer’s opportunity to work the land during that one year is another additional factor that the farmer must have to regard.

Although the income of the farmer will increase by $1 50,000, the expense of $85,000 is also a large amount. For that matter, the same price of $1,000,000 for the next year must be thought over by the farmer, considering the expenses he spent for the development of the land. The profit realized by the farmer from the work he spend on the land which is $65,000 is also large money and if he is going to sell the land now, that supposed-to-be profit will not be realized. Capital Gains Capital gains are a common notion in transactions involving sale of capital assets like the farmland.

It is defined as “an increase in the value of a capital asset investment or real) that gives it a higher worth than the purchase price (Capital Gain, 2014). ” Using that definition, we can further understand that any developments made to the property will result in the increase of the value of the property. In relation with the case scenario, it can really be identified that if the farmer makes some improvements to his farmland, the value of the property will surely increase.

And since he has already made a deal to sell the property at $1,000,000 after a year, he cannot Just simply revoke the contract Just because the value of the farmland is rater than $1,000,000. However, although the farmland makes a capital gain, the price to which it will be sold can result to a loss on the part of the farmer. But, there are also cases in which the value of the property is greater than its acquisition but lower than the price to which it will be purchased. In that case, the farmer makes an income. A farmer can still earn money through his farmland during that one year.

A well- cultivated land is best suitable for planting and vegetation. The farmer can then earn additional income by selling the fruits of the property such vegetables and fruits. It is ere helpful to know that proper land management and land use will yield better outcomes, specifically financial rewards on the part of the seller. There are Just some procedures that the farmer must pay attention to in order to increase the value of his land and earn money out from the work he has done to it. In spite of the fact that land cultivation is not an easy Job, the rewards that the farmer will reap in the end are very fulfilling.

Among the many things that the farmer can do are as follows (Evangelists, 2006): ; Teach Raise small stock Hospitality/Retreat Middleman Touring Pond fishing and casting pools Petting zoo, historical farm Although not all abovementioned tips can be done to a farmland which is planned to be sold, the farmer can still innovate and reinvent in order to develop its farmland and at the same time, earn additional income out from all these activities. For instance, the farmer can plant trees and vegetables and raise a small stock of animals during the year.

In that manner, he will be able to increase his income and earn profits as well. There is also a tendency that the holder of the contract or the buyer decides to purchase the animals and pay additional amount for the trees that have been planted in the area. As a result, the farmer will be able to receive not Just $1 for the farmland. Personal Saving Behavior of the Farmer and the Subscriber The main reason why significant details have been examined, particularly regarding the financial management concept is that money management and financial planning are essential considerations that everyone must have to take into account for.

Personal saving behavior basically denotes to the idea of how people find multiple ways to minimize their expenses and have more money to save. As a matter of fact, the existence of banks is living evidence that people like to save for heir future. This then explains why capital gains among the owners of property are very much common as they seek to achieve more profits through making more developments on these properties (Peek, 1983). On the part of being a subscriber, it is very evident that my personal saving behavior can be described to be practical.

Considering the way I weigh my options out before resorting to the one-year subscription, it is underscored that it is my personality to save whatever amount I deem is material. In that context, it will be my decision to go for the two-year subscription which is $775, instead of paying for the seer amount of $420 which is only for a year. Since I will still subscribe to the magazine for the next year, I think it will be better to Just go for the two-year subscription. The $65 that I will save from paying $775 instead of the expected $840 will be spent for other things which I believe are important.

In another end, the farmer’s personal saving behavior is clear on the way he chooses to go for the $950,000 that the contract holder will pay him now instead of waiting for one year for the $1 The farmer is Just being practical to choose the lesser amount as he is expecting any unexpected expenses which might be rater than the $50,000 difference. For the second scenario, I think that the farmer must have to wait for one year before selling the farmland since he can still be able to earn additional income through his initiative of developing the farmland like planting vegetables and trees or raising livestock.

In that manner, there is also a chance that the contract holder will purchase the land together with the animals, thus adding sufficient payment. From all the above mentioned decisions that the subscriber and the farmer must make, we can be able to emphasize that these people need to have enough o place a high regard on the benefits of the decisions that they are going to make. Financial education basically helps them with that. Proper financial planning is the best thing that the subscriber and the farmer must have to make.

Conclusion Financial education clearly plays a big role in helping individuals and businesses make effective and successful decisions that involve their financial resources. Financial management, for one, aims to guide individuals to effectively plan for their finances and make effective budgeting so that they can be able to know where they’re assets are going and how much they spend for their expenses. The subscriber and the farmer in the case scenario are clearly affected with the way financial management will be of huge help.

Their perspectives with regards to proper spending and weighing out options are a part of the whole financial management. Their awareness on the time value of money is also helpful in allowing them to know how much to spend. The farmer, for one, must have to learn to increase its income through thinking more initiatives and starting activities that will help him yield profits. In that aspect, the farmer will be able to determine the right things to do in the process of developing his farmland.