Understanding means the wisdom that come from trusting in God and learning from His word. It is the ability to apply that learning to life in the light of God’s word, that is wisdom. Our wisdom or lack of it determines our prospects in this life. When we have wisdom we can make right choices based on what God knows and has taught us. Proverbs says very little that is good about a fool. A fool is one who chooses not to know God. Our wisdom affects what we say and helps us to teach others this knowledge. The words that come from this understanding and our lives as we follow God allow us to speak in a way that helps others to the depth of their soul.
Proverbs 16:22-24 Understanding is a wellspring of life unto him that has it: but the instruction of fools is folly. The heart of the wise teaches his mouth, and adds learning to his lips. Pleasant words are as a honeycomb, sweet to the soul, and health to the bones.