The key principles of financial management include:

1. Planning: This involves setting financial goals and developing a strategy to achieve them. In terms of personal finances, this may involve saving for a down payment on a house or creating a budget to reduce debt. For businesses, planning may include budgeting and forecasting to determine revenue and expenses.

2. Budgeting: The process of developing a budget and monitoring expenses is crucial to effective financial management. It allows individuals and businesses to track spending and make adjustments as needed.

3. Cash flow management: This involves managing the timing of cash inflows and outflows to ensure that there is always enough money on hand to cover expenses. This is particularly important for businesses, as cash flow problems can lead to bankruptcy.

4. Investment: Investing money wisely can provide long-term financial security. For personal finances, this may involve investing in stocks, bonds, and mutual funds. For businesses, investment may include expanding operations or developing new products.

5. Risk management: This involves identifying and mitigating potential risks that could impact financial stability. This may include purchasing insurance or diversifying investments.

The key principles of financial management can be applied to effectively manage personal and business finances by creating a financial plan, developing a budget, closely monitoring cash flow, making smart investments, and managing risk. By following these principles, individuals and businesses can achieve financial stability and long-term success.