As a child growing up in church, I heard this verse repeated several times, but it wasn't until I was a bit older that I realised the importance of it. The Fear of God really is the foundation of wisdom for three reasons.
1. God is the author of all Wisdom. God is omniscient, meaning He knows everything. Therefore it stands to reason that if He knows everything, then He's the only one who can directly us wisely. Wisdom comes from having a clear picture of what's around you, circumstances and their outcomes. So if God knows everything, then He has the best picture of our circumstances and their outcomes and can direct us best.
2. Fear of God makes us act more carefully. A healthy fear of God means that we act with total consideration of what He would think of our actions. Think about this: Children tend behave better when their parents are around, not because they are afraid of their parents, but because they've been taught to behave a certain way and are sometimes fearful of the outcome of negative actions. The same is with us and God, a relationship with God brings reverential fear, and with that reverential fear, knowing that God is ALWAYS watching, we change our behaviour and act more wisely.
3. Good Judgement comes even easier when we follow God's rules. God has laid out several rules for us in the Bible. Not because He felt like restricting our lives, but because He wanted to enhance it. Upon close examination we see that all those rules are really meant for our protection. Take for example the commandments that say we should not fornicate or commit adultery. Those are sins that are powerful enough to destroy not only our lives but the lives of others as well. When you fornicate, you sin against God, but you also harm yourself. There is always the possibility of contracting an STD, getting pregnant without planning to or being seriously hurt emotionally. Things such as one night stands or maybe sleeping around hurt our reputations and destroy us eventually. Conventional wisdom says to stay away from those things, but have you noticed that conventional wisdom comes from Godly wisdom. God knew how these things could devastate us so the rules were set from the beginning. Good Judgement definitely comes from a relationship with the Holy One.
My encouragement to you today is to seek relationship with the Author of Wisdom. He is single-handedly the best source of wisdom and good judgement. If you already have a relationship with Him, then follow His rules, they are really meant to protects us.