Visions
of dancing sugarplums are no more and the halls have been free of holly
for weeks. It’s official—the holidays have come and
gone. You’ve overeaten, overslept—and overspent. Getting your diet and
routine back in order is one thing, but looking at that credit card
statement is the last thing you feel like doing.
of dancing sugarplums are no more and the halls have been free of holly
for weeks. It’s official—the holidays have come and
gone. You’ve overeaten, overslept—and overspent. Getting your diet and
routine back in order is one thing, but looking at that credit card
statement is the last thing you feel like doing.
Now what? Even if you’ve blown your holiday budget and maxed out your cards, following these five steps in the next 30 days can
help you take control of your credit and become financially fit in 2014:
help you take control of your credit and become financially fit in 2014:
- First,
check your credit report and score. Take a comprehensive look at
what’s there, good and bad, and be sure to thoroughly review your report
for any errors or mistakes, especially after the holidays. You can do
this annually for free through
AnnualCreditReport.com. It’s also a good idea to check your credit score to see if it’s dropped and to give you a basis for comparison moving forward. - Know what you owe.
Tally
up those balances and determine your debt to credit ratio—that is, the
amount of money you owe versus your available credit.
Anything above 50 percent is a red flag and will lower your credit
score. This means that if you have three credit cards with a combined
limit of $10,000, your total balance should be below $5,000.
- When deciding which card to pay off first, always
focus on the card with the highest interest rate, which is the most expensive for you. - Don’t close your cards. You end up hurting your
credit score by losing your debt to limit ratio as well as the age and mix of your credit. - Sure, it’s intuitive, but simply
paying your bills on time accounts for 35 percent of your credit
score. Make sure all of your holiday shopping bills are paid at least in
part – even if you can’t pay them in full.
More information on using and understanding credit is available via
Better Money Habits, a collaborative effort between Bank of America
and the Khan Academy that provides a new way to learn the “why” and
“how” behind personal finance.
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If you would like for me to share savings that your company has, email me today to find out more.
