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Managing your personal finances is essential to your long-term success, especially with the state of the economy. People everywhere are being laid off, going bankrupt and losing their homes. To minimize the effect of the economic downturn on your financial stability, follow our five best tips on personal finance and credit.

1. Have a clear goal in mind. The setting of a realistic goal is the first and most important step in managing your personal finances. Every person's goals are different; one person may be saving for a down payment on a home, and the next may be saving for a dream vacation or to pay down credit card debts. When setting those goals, be as realistic and specific as possible.

2. Put together a budget. You will hear this particular bit of advice over and over again, but the budget is the most essential tool in the management of your finances. Combine your goals with your budget, and be sure to leave a bit of "wiggle room". You will have a much harder time sticking to your budget if a small purchase puts you over.

3. Use the tools at your disposal. There are a lot of online and software-based tools that can help you manage your credit and your finances. Online banking allows you access to your account at any time of the day or night, and personal finance software can help you create your budget and track your expenses.

4. Micromanaging. This is one of the few places where it is a good thing- especially when you first begin getting your finances in order. Keep all your receipts, write transactions down in your checkbook's register or input them into your finance software. Categorize your expenditures and look over your budget a few times a week to keep on track.

5. Be ready for emergencies. Nothing can decimate a budget faster than an emergency. It is a good idea to have money set aside for common emergencies like car trouble or medical bills. If you don't have to use credit or take out a loan to pay for these, you will be more financially stable in the long term.

Managing your personal finances can be a tough job, but it is a key component in the upkeep of your lifestyle. With the simple tips we've just given you, you will be able to get a handle on your finances and help you prepare for the future.