Knowing how markets work, how to prepare budgets and financial statements, the different types of investments, how returns and fees are calculated, how to prepare financial projections and so on is important. What having this knowledge does not guarantee however, is financial discipline.

Financial knowledge is knowing that leaving large sums of money in a savings account means you’re losing potential returns from other investments. Financial discipline is being able to control your consumption in order to save in the first place.

Avoiding high fee charging asset management services is financial knowledge but that does not mean that you have the financial discipline to invest in anything at all.

Both financial knowledge and financial discipline are important in reaching financial goals. While knowledge can be gained, discipline is more of a character trait. And that’s why there are many personal finance advisers who focus on people’s spending and saving habits and advise on protecting people from their consumption impulses.