Organizing Your Personal Finances

Updated: January 2, 2015

It’s going to be the end of the year soon and from what I know, there are two New Year Resolutions that people usually think of during this time – they’d either want to lose weight or save more money next year.

I’m not a health guru so I can’t really help you much with the first one. But saving money, now that’s something I can help you with.

Organizing one’s personal finances is a necessary step if one wants to succeed at saving money.

Lucky for you, that’s the main focus of our guest post for today. So let me share with you this article from Peter who dispenses some very good tips on how to be financially smart today.

When it comes to financial planning, enough can not be said about the importance of understanding, budgeting, and planning.

Upon turning 18 and moving out in the world I quickly came to realize how ill prepared I was for the management of my own personal finances.

I had no understanding of the credit system and how that would greatly impact my financial future. While I was fortunate enough to land a great job early on – all the money in hand, was spent with no regard for the distant future; let alone my needs for the next week.

Although I struggled early on, I was able to later on create a simple personal finance system that has since served me well.

Focusing on understanding personal finances, budgeting for the future, and planning far ahead – I was able to secure my personal finances in such a way that they provided me with basic security. And I hope that by keeping with these three basic principles, it can also help guide you along the way in planning out your own finances.

Know the System
When you first enter the world as an adult, the concern of credit scores may be far from your mind. Understanding how your credit will be affected by the financial choices you make early on will one day have a huge impact on your ability to achieve all your goals.

While you may not be too concerned with securing a personal loan for the car of your dreams, or being able to purchase you first home now; in the future, your ability to achieve these things will be greatly influenced by the choices you make early on.

When it comes to the basics of understanding credit, there are two things to always keep in mind. First, pay your bills on time and second, do not borrow more than you absolutely need.

These are the two biggest factors that will affect your credit score. For every loan that you ever obtain through a financial institution, a detailed payment history will be relayed to the major credit bureaus. Make your payments on time, without delay, and a positive report will be given in regards to your ability to repay personal loans.

When it comes to debt, only borrow what you absolutely must. While we all may all want that dream surround sound system, you must evaluate for yourself whether or not that is a want or a necessity. When it comes to debt – the money you make vs. the money you owe will be figured in to your credit rating.

Make a Budget
It is all too easy for us early on to spend the money we have in our hands just as quickly as it comes in. The problem with this however, is that we are not always taking in to account the money we will need in the near future.

In making a list of every expense you plan to have every month, you can get a better idea of what money is available to spend where.

If you are renting a place with some friends, keep in mind how much money you will be spending on rent and utilities. These expenditures will be very close to the same amount every month, so set money aside to cover these monthly bills.

Estimate how much money you intend to spend every month on things like food, clothing, entertainment, and the likes. Having a plan for these and sticking to your budget will ensure that you are not spending more money than you have.

A budget is a clear way to organize your funds. This is a key principal when it comes to personal financial security.

Plan for the Future
Planning for the uncertainty of the future is the very best way to ensure that you will not fall victim to financial woes.

When creating your budget, make plans for unexpected events to arise. Storing away a little money for a rainy day will help to ensure that you can handle any obstacle that life may throw your way.

When it comes to personal financial security nothing is more important than understanding how personal finances work, making a budget, and planning for the future. Keeping these three key concepts in mind will provide an excellent foundation for the future of your personal finances.

Work hard to become disciplined in your financial habits and you will most definitely feel secure in the future of your personal finances.

This guest post is contributed by Peter Puckett, a blogger who runs a site about personal loans.

Get more helpful tips on personal finance by subscribing to Ready To Be Rich.

Photo credit: mynameisharsha and Jeff Keen


  1. I always fail in making budget because i do not make it well. Always and unexpected expenses always come to me. I wish i can handle and control my budget and enjoy my New Year soon. Take for teaching the me to organised my own finance. Hope it will work.

  2. I love budgeting my money and I am happy that I am so balanced with it. I save and same time I spend with no worries. heheeh!

  3. It’s a mentality that affects most young adults that why think of the future when you can enjoy it now thus many go and spend all their bucks in bars and night clubs specially on a Friday payday. It is worth noting one’s expenses on a day to day basis until one will actually be aware that in a day one spends nearly all his or her one week paycheck…

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