HOLIDAY “TWO-DOS”

While the holidays are a festive time with family and friends, a potentially not-so-fun part of the season is the temptation to go overboard on holiday shopping. Whether it’s gifts for everyone on your shopping list, refreshments to create memorable parties and other events, buying trendy decorations or other holiday related purchases, it can be a time of financial stress.

With a little planning, this can be your year for a financially healthier approach. The following holiday “two-dos” can help you keep financially healthy through the season.

1) CHECK UP ON YOUR CREDIT HISTORY: Now is a great time to take inventory of your overall credit history. A healthy credit score makes it easier to get credit if needed, making you eligible for lower interest rates and saving you money in the long run. A low score typically means you’ll have to pay higher interest or could lead to denial of credit. Things to look for include:

• Check your name, social security number and contact information.
• Make sure all the accounts and credit inquiries on your report are truly yours.
• Look to see if the payment histories, balances and account status are all correct. If you find mistakes, file a correction directly with the credit reporting agency on their website.

Fortera members now have instant access to their credit score and credit report, along with personalized tips on how to improve their score or maintain an already great score. Click here to learn more. After checking the accuracy of your credit reports, remember that the most important things you can do to maintain a strong credit score is pay your bills on time and keep your debt balances low.

2) MAKE A PLAN: Take the time to develop a spending plan for the holiday season, complete with your full gift list, incidentals like cards and gift-wrapping, entertainment and travel plans, event schedules and other items needing financial resources. A holiday budget can help you stay on track.

• Prioritize holiday-related spending to decide what is non-negotiable, and cut where you can. For instance, can you cut back on entertaining this year by hosting pot-lucks, or plan low-cost family outings to free seasonal concerts? Can you get creative when it comes to gift giving, setting a purchase limit to family gifts?
• Make a written spending plan to determine how much money you will devote to your regular bills, living expenses and savings as well as the seasonal purchases. By setting your budget in advance, it’s easier to manage your money to meet your goals.
• Add up all your income sources to find out how much money you have to apply to seasonal purchases including travel and entertaining.
• Keep your spending plan on your phone or device so it is always with you as you begin holiday related purchases. Track your purchases on every shopping trip or visit to an online store. By keeping a running total of holiday expenditures, you won’t be surprised when the credit card bills start coming in January.
• Shopping with cash rather than credit cards is a good way to set a limit on spending and avoid temptation. When the cash you have allotted for gift giving is gone, it is gone. Credit cards enable you to spend beyond your limitations.

While everyone’s situations and goals are different, keeping the focus on these “Two-DO’s” of financial health can help you celebrate without over-spending or maxing out credit cards.

Adapted from an article distributed in partnership with GreenPath Financial Wellness.