The concept of system thinking applies to personal finance management in the way that it encourages individuals to view their finances as a whole system, rather than isolated elements. This means considering how different aspects of your finances, such as income, expenses, savings, and investments, interact with each other and influence the overall financial health. For example, the money you have in your bank account (stock) can be affected by various factors (flows), such as your income, your spending, and the interest you earn. By understanding these interactions, you can make more informed decisions and manage your finances more effectively.
How do you avoid wasted time, money, and resources from short-sighted decisions? When you think in s...
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