5 Ways to Get Your Credit on Track before the Holidays

It’s hard to believe another year is coming to an end. If you made a New Year’s resolution to clean up your finances last year, have you saved as much as you wanted? Have you paid down any debt or has your debt actually increased? Here are five tips from GreenPath personal finance counselors to help you better understand your finances, and how you can get back on track, as the holidays approach.

1. Take inventory. Are any major purchases on the horizon before the end of the year, like a vehicle, appliance or other big ticket item? If there are, start saving now. So often, when it is time to make a major purchase, it catches us off guard and we immediately turn to credit to pay for it. If your washing machine will need to be replaced in the coming months, try to set aside cash now. So when the time comes to replace it, you may be able to minimize the use of credit.

2. Watch holiday overspending. Impulse shopping and last minute shopping can tip many of us over into overspending. Talk it over with family and friends – setting a $20 gift limit can be a smart way to go, Many of us underestimate how much we are going to spend, so make sure your number is realistic. Watch for online sales or consider these other ways to spread joy.

3. Other expenses. What other expenses do you have coming up? Do you need to save for back-to-school clothing and supplies? Are you going to be making charitable contributions at the end of the year? Start accounting for these expenses in your budget. Maybe make the donation now, rather than at the end of the year. That way, you can avoid the budget crunch in December, when there are other expenses to consider.

4. Review your spending plan. Take time to make a realistic plan for the money that you earn. So often our budget stops once the bills get paid. But, a budget really should be a plan for every single dollar that you earn. A spending plan worksheet can be helpful.

You should have a line item in your budget for groceries, gas, savings, and entertainment. If you haven’t been following a budget, take time to create one and track your expenses so that you can go back, review and adjust as needed.

5. Make a plan for the year ahead. Have you accumulated debt over the past year? If so, now is the time to consider why that happened and create a plan for how to tackle the debt now. If you put it off a few months, it will nearly be the holiday season, which likely will force you to address your debt in the year ahead. Take the time and start now.