1. The term "financial management" first appeared in newspapers in the early 1990s.

With the expansion of my country's stock and bond market, the increasingly abundant commercial banks and retail businesses, and the overall income of citizens rising year by year, the concept of "financial management" has gradually become popular.

Personal financial management varieties can be roughly divided into personal asset varieties and personal liability varieties. Funds, stocks, bonds, deposits, and life insurance belong to personal asset varieties; while personal housing mortgage loans and personal consumer credit belong to personal liability varieties.

2. What is financial management? When most people talk about financial management, they think of either investing or making money.

In fact, the scope of financial management is very wide. Financial management is the management of a lifetime's wealth, that is, the cash flow and risk management of an individual's lifetime.

It includes the following meanings: ① Financial management is about managing money for a lifetime, not just solving urgent money problems.

② Financial management is cash flow management. Everyone needs money (cash outflow) as soon as they are born, and they also need to make money to generate cash inflow.

Therefore, no matter whether you have money or not, everyone needs to manage money.

③ Financial management also covers risk management.

Because more future flows are uncertain, including personal risks, property risks and market risks, they will all affect cash inflows (risk of income interruption) or cash outflows (risk of increasing expenses).

Scope of personal finance management ■ (1) Making money - lifetime income includes work income generated by using personal resources and financial management income generated by using monetary resources; work income is making money with people, and financial management income is making money with money.

This shows that the scope of financial management is broader than making money and investing.

Including: ① Work income: including salary, commission, work bonus, income from self-employed business, etc.

② Financial management income: including interest income, rent income, dividends, capital gains, etc.

■(2) Money use--Expenditures Lifetime expenditures include the living expenses of individuals and families from birth to old age, as well as financial management expenses caused by investment and credit use.

Some people have expenses, and having a family has burdens. The main purpose of making money is to cover personal and family expenses.

Includes: Living expenses: including food, clothing, housing, transportation, education, medical care and other household expenses.

Financial management expenses: including loan interest expenses, protection insurance premium expenses, investment fees, etc.

■ (3) Saving money - assets When the current income exceeds the expenditure, savings will be generated, and the savings accumulated in each period are assets, which is the principal that can help you make money and generate investment income.

In old age, when people's resources cannot continue to work to generate income, they must rely on money resources to generate financial income or liquidate assets to meet their needs in their later years.

Includes: ① Emergency reserve fund: Keep a sum of cash in case of unemployment or unexpected needs.

② Investment: A portfolio of investment instruments that can be used to generate financial income.

③ Property purchase: Purchase a house for self-use, a car for self-use, and other assets that provide use value.

■ (4) Borrowing money - Liabilities When cash income cannot cover cash expenditure, you need to borrow money.

Reasons for borrowing money may be temporary inability to make ends meet, purchase of real estate or cars and appliances that can be used for a long time, and investments to expand credit.

If the borrowed money is not repaid immediately, it will accumulate into a liability and interest will be paid based on the balance of the debt. Therefore, before the loan is paid off, in addition to living expenses, each period's expenditures also include financial principal and interest amortization expenditures.

Including: ①Consumption liabilities: such as credit card revolving credit, cash card balance, installment payment, etc.

②Investment liabilities: such as margin financing and securities lending, and borrowed money investments that exert financial leverage.

③Self-use assets and liabilities: such as housing loans and car loans required to purchase self-use assets.

■(5) Save money - save taxes. In modern society, not all income can be used to meet expenses. Income tax must be paid on income, property tax must be paid on the sale of property, and gift tax or inheritance tax must be paid on property transfer. Therefore,

How to legally save income tax in cash flow planning, and how to legally save gift tax or inheritance tax in property transfer planning have also become an important part of financial management, and have become the primary consideration in financial management for high-income individuals.

Including: ① Income tax tax saving planning ② Property tax tax saving planning ③ Property transfer tax saving planning (this project is more commonly used overseas) ■ (6) Money protection-the focus of insurance and trust money protection is on risk management.

Make insurance or trust arrangements in advance to protect human resources or existing property, or to obtain financial management to make up for the loss when a loss occurs.

The function of insurance is that when an accident occurs and the family's cash income cannot cover current or future expenses, there will still be a sum of money or income to make up for the gap, reducing the impact of unexpected imbalances in income and expenditure during the journey of life.

In order to obtain life insurance and property insurance protection to compensate for the loss of people or property, a certain percentage of premiums must be paid. Once an insurance accident occurs, the financial income generated from the compensation can replace the interrupted work income to meet the living expenses of the family or survivors.

Or use claims to repay liabilities to reduce financial interest expenses.

In addition, the trust arrangement can make the trust property independent of other private property and not subject to the recourse of creditors, and has the function of protecting existing property from loss.

Including: ① Life insurance: life insurance, medical insurance, accident insurance, disability insurance.

② Product insurance: fire insurance, liability insurance.

③ Trust.

Steps and core of financial planning The first step is to review your asset status.

Including existing assets and expectations of future income, knowing how much money can be managed is the most basic premise.

The second step is to set financial goals.

Financial clearing goals need to be defined qualitatively and quantitatively from specific time, amount and description of goals.