It’s early November. You just blew a little money on Halloween decorations and candy for the kids, and now you’re just worried about getting through Thanksgiving. Protecting your credit is a particularly challenging task during that most spendy time of year, The Holidays.
Here are a variety of strategies to keep your financial life from getting out of control and having to resort to a credit repair service.
First of all, the holidays began at Halloween. Decorations, parties, treats and holiday outfits are all expenses that must be considered as part of your financial plan, or budget.
Budgeting is the first of our essential things to do. Now is the time to start thinking this process through for the next few months:
- Estimate all income from now until early January. The first rule of fiscal prudence is don’t spend money you don’t have. Sometimes that’s something we adults can manage, but sometimes it’s also okay to hold a bit of debt, and it can even be used to improve your credit score.
- Decide on an acceptable level of debt to take on. Look realistically at your budget and don’t figure on paying it off with your tax refund unless your car is invulnerable to collision and has no parts that can need repair. Also your physical body ($5000 yearly healthcare deductible?).
- “Is borrowing necessary?” Consider some evenings or weekends doing gigs like Lyft or part-time holiday work to have spare cash rather than charging it all.
- “Will I pay it all off within a few months by taking a portion out of every paycheck?” Come up with the amount and limit your holiday spending to that amount or less. Consider printing an old-school check register and write down each holiday purchase; keep a running total, so you know where the line is. If it’s eight hundred dollars, you should figure on taking a couple of hundred dollars out of every paycheck to pay it off in four months.
Remember, the more you spend shopping, the more opportunities there are for identity theft and credit card fraud.
It’s a really good idea to keep all receipts from your holiday spending. Don’t make the mistake of shoving them into the bottom of a purse or backpack, or the store sack. Collect them in a slot in your wallet or a special envelope. Compare them to your credit card statement or online banking transactions. Don’t wait until after the holidays to reconcile this information. The earlier you detect and stop identity theft the better chances you have of minimizing the damage an identity thief can cause.
It’s crucial to keep up on your credit utilization to keep your credit score up during the holidays. Don’t use more than 30% of your available credit to keep your score unaffected by holiday spending. Are you still recovering from last year's holiday spending? Do you need help repairing your credit for the new year?
Download our Free Guide to Finding the Best Dallas Credit Repair Company. The sooner you select a company to help you on your way to better credit the sooner you will see results!