[3] Throughout the years there have been infinite companies, persons and also countries that have been declared bankrupt, caused by financial mismanagement.
Governments that mismanage their finances can experience a decline in their economic growth and may be unable to provide important public services.
Additionally, governments that are unable to manage their finances properly may be forced to take drastic measures, such as increasing taxes or reducing spending, in order to balance their budget.
[12] Individuals who mismanage their finances can incur substantial debts and may be unable to meet their financial obligations.
Poor financial management can also cause a business to incur substantial debts, which can lead to legal action or bankruptcy.