Financial management is an important skill that everyone needs to master, whether rich or ordinary. Financial management can help us achieve financial freedom and improve the quality of life. In this article, I will share some common sense of financial management that ordinary people should know to help you master financial management skills better.

Consumption should be rational

Rational consumption is the first step in financial management. Before spending, we need to think carefully about whether we really need this item or service and whether there is a better choice. It is recommended to compare prices before buying large items to avoid excessive consumption.

Save in a planned way.

Saving is the foundation of financial management. We need to have a savings plan to save a certain percentage of our income for a rainy day. It is suggested that monthly savings account for about 20% of income.

Be cautious in investing.

Investment is an important way to realize financial freedom, but it also needs to be cautious. When choosing investment products, you need to know their risks and benefits, and choose according to your own risk tolerance. Novices are advised to choose low-risk investment methods, such as funds and bonds.

Be careful when lending.

Lending is a high-risk financial behavior. If you have to borrow money, it is recommended to choose a low-interest loan and make a clear repayment plan. Don't borrow too much to avoid getting into financial trouble.

Society plan

Planning is the key to financial management. We need to set clear financial goals and make plans to achieve them. It is suggested that short-term, medium-term and long-term financial goals should be formulated and transformed into feasible action plans.

Increase passive income

Passive income can help us achieve financial freedom. In addition to wages, you can consider investing in real estate, stocks and funds.