It will come as no surprise that the fundamental principle is planning.
To me the difference between financial planning and product purchasing by individuals is in the planning. Too many people make decisions based on emotion, greed and ego. Any one of these can help you make the wrong decision. But to make them in isolation, which is very often the case is where things go wrong.
How many of you can look at your finances and easily see a pattern of products that were bought that looked good at the time but have rarely been given a second thought?
Buying things in isolation that make sense at the time gives you nothing but a collection of what was hot. It would be like never updating your wardrobe. When you buy your clothes you generally have an idea of what you like and how you lie to look. That’s a plan in your own mind. You don’t buy a random hotchpotch of clothes that don’t match.
Planning your finances requires slightly more sophisticated planning than buying clothes but the concept is the same. You must have a plan and know why you are buying, saving or investing. Without that plan my guess is that you will be poorer for it.