The Difference: Understanding Accounting & Finance vs Financial Responsibility

Mike Cashion, MFF Director of Operations

By: Mike Cashion, MFF Director of Operations


There are many people who, generally speaking, are very intelligent or have a working knowledge of Accounting and Finance. What is often not discussed is the difference between knowing Accounting and Finance vs making financially responsible decisions. If you are smart or understand Accounting or Finance, that does not automatically mean that you make responsible decisions with money. We see this all the time with individuals, non-profit organizations and for-profit organizations. We also see it among those with little traditional education and with those with elite and extensive levels of education. We see this with those below the poverty line and those who are paid large sums of money for their time and energy.


During a recent meeting, the topic came up in the form of how important financial literacy is for everyone and the importance of starting early because the groundwork often carries on with people throughout their lives. At this meeting, one of our guests started to share various stories of his time in the corporate world working with clients of all sizes all over the world. The common theme was that when he began working with the companies (often to turn around a declining or failing business), he would dig into the books and find countless poor financial decisions made by leadership. 

What was even more surprising was that these finance and accounting executives were being highly compensated to make sound financial decisions for the company to survive, grow and thrive in the future. Despite being very knowledgeable about accounting and finance, attending prestigious educational organizations, and having a lengthy track record of working in various respected organizations, they were continuing to make decisions that hurt the organization. They were wasting money everywhere, not saving or setting aside funds for mergers, acquisitions or research and development, and keeping the company on the edge.


Although this conversation focused heavily on decisions of high-ranking finance and accounting executives, it translates well to any individual. Everything starts with the individual and their relationship with money and financial decisions. Then it scales up and carries with them throughout their professional career. We all have those friends who appear on the outside to have an awesome job with an epic compensation package, who appear to have it all figured out with this fantastic life (according to their social media or the show they put on every time we see them). Oftentimes, the reality is that it is indeed all a show in an attempt to look good to others while being wrapped in a web of bad financial decisions that are holding them back. 

The nice car, the nice clothes, the elegant apartment, everything is new, and etc…They may be paying for these things as they experience them but they are not thinking ahead to the future. Will I be able to hold onto this well-paying job? Do I need to invest money in education or leveling up my skills to remain relevant in my field? Am I saving enough to have a nice quality of life later on? Do I have enough money set aside to service this expensive car if damage is done to it? What happens if I am unemployed for 6-12 months? All of the same questions arise, as with the organizations we were talking about. The financial decisions we make as an individual can and often do translate to how we view financial decisions at work and elsewhere.


This is why financial literacy and understanding the power of saving and sound decision making are so very important. Since I began working with MFF, I have had regular conversations with Peter Morgan, who started Morgan Franklin Fellowship. During one particular discussion, we got on the topic of financial habits that Peter has adopted. 

He mentioned a couple of them: 

  1. He never buys bottled water and always packs a water bottle that he can refill
  2. He rarely, if ever, pays for parking and doesn’t mind walking a couple blocks

These might seem like minor things. What it did for me and what I hope it does for you is pose questions in your mind. Are there opportunities to save money by adopting simple new habits? Do the examples above matter enough to you to pay for? If you do the math over time, it adds up to a lot of money saved that could be invested in other things that are of high value to you. Whether that is in a family experience, money that could go towards retirement savings, additional learning opportunities, investments into a venture you want to pursue or etc., that is up to you.


I hope that you will join me on the journey to better financial decision making, saving and financial independence. If you know of a young person who could benefit from understanding how to approach saving, financial decision making and generally all things financial literacy, encourage them to get started with us by signing up for our Standards of Financial Literacy HERE!

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