Getting caught up in the holiday hoopla of things, we’re easily distracted from some of the more practical things in life. It’s a welcome distraction, of course, shifting our attention from work-related matters and other regular responsibilities to more of a focus on family and fun. But if you have been repairing your credit, that’s one area in which you don’t want to drop the ball any time of year.
That’s not say you should spend the holidays going over your credit reports or writing letters requesting debt validation. Certainly, a break from the tedium of those jobs is a welcome, necessary one. However, the way you spend on holiday gifts and parties today, and budget for tomorrow, should remain in the forefront of your mind.
If you are in the midst of credit repair efforts, spend this holiday season sticking to your budget. Now, this implies the extra expenses always associated with the holidays, including gifts, food, parties and travel. If you haven’t already, sit down and figure out just how much you can afford for holiday spending this year. Ideally, this is an amount you can pay with cash you already have on hand. Of course, this may limit your spending capabilities considerably, but the last thing someone trying to repair their credit needs is more debt charged up on credit cards … with one notable exception.
Feel free to charge some of your holiday spending to credit cards provided:
1) You know you can pay the balance in full when you receive the bill
2) You are confident that charging to a card will not trigger any out-of-control credit card spending habits that contributed to your credit troubles
In fact, responsible use of a credit card – meaning charging only what you can afford to pay off within a month’s time – can actually help your credit repair efforts. Making that a habit in the New Year will improve your credit considerably, which brings me to my my next point.
With the New Year right around the corner, now is the time to plan your budget in 2013. Again, you need not spend countless hours pouring over your finances this holiday season. But it’s worth taking some time to look at areas in which you can cut back. Even if your finances are feeling in pretty good shape these days, the less you spend, the more you save, and the less likely you are to incur debt you cannot afford to pay (i.e., sabotaging your credit repair efforts).