The holidays are a favourite time of year for many. However, they can also be stressful when it comes to money. Between ensuring everyone is checked off your “to-buy-for” list, and impulse buying while you’re doing so, it can be tricky to prevent excessive spending that puts your credit in trouble. Even though you may not think so, there are ways to keep your spending under control. How can you maintain good credit over the holidays while still completing your list of things to do and buy? Here are some tips to help you out so you can enjoy the festive season as much as possible.
Set a budget and stick to it
The more you spend in credit, the more you’ll owe back once the rush of the holidays are over. When you look at your monthly statements at the beginning of January, it can be shocking to see what you spent, so it’s smart to set a budget for spending over the holidays to keep yourself in check. It can be tricky to anticipate all your spending, as new expenses seem to pop up all the time, such as holiday parties and spontaneous outings with friends. However, there are some areas where you can prepare ahead of time. For example, think about who you’re exchanging gifts with, and agree on a spending limit. If you already own decorations you can use for your home, skip out on buying new ones. The holidays don’t mean we have to blow our budgets buying the newest and best versions of everything.
Once you have your budget set in stone, stick to it so you can maintain good credit. You should track your budget to ensure you’re actually following it, and check in on it regularly. It doesn’t matter how you go about tracking your budget; you can write down your expenses using an old-fashioned pen and paper, your notes app on your phone, or you can use a handy budgeting app.
Remember to pay bills on time
This seems obvious, right? Timely payments are one of the best ways to maintain good credit, after all. Paying your bills on time should be a priority year-round, but this is especially true during the holidays. We tend to make more purchases this time of year, which means your credit card will soon be tallying up the interest you owe. If you get behind on your bills, that interest will add up more quickly than usual, and you’ll end up owing more than you ever bargained for. If you’re unable to make your payments, this can lower your credit score. To reduce this risk, you can set up automatic payments to help streamline the process.
Don’t add to your credit
It seems like every store these days has their own credit card for you to take advantage of, and during the holidays especially, they are often all over you to sign up. However, it’s best not to add on to your existing credit cards if you’re trying to keep your score in good shape. For one thing, applying for new credit always has a negative impact on your credit score as it appears as though you’re planning major purchases or other big expenses. Plus, the more credit cards you have, the more you’ll spend and owe. As we already mentioned, this can take a big chunk out of your available credit and leave you in debt if you’re unable to make your payments.
Keep an eye on security
We all do our shopping online these days, and hackers are well aware. While cyber attacks of all sorts have been on the rise since the start of the pandemic, the holidays are prime time for identity theft and credit card fraud. When we’re entering our information on tons of different websites, it’s easy for hackers to steal it. This is especially true if you don’t use trusted browsers or a virtual private network, which encrypts and protects your data online. If someone goes on a spending spree with your credit card, it will be a big hassle trying to work things through with your credit card company to maintain good credit. Keep an eye on your bank account and statements as we move through the season. If something looks suspicious, call your credit card provider right away.
Contact a broker
Are you hoping to get involved in real estate by buying a home or refinancing your mortgage? Get in touch with a broker! They can help you navigate your financial goals during the holiday season while maintaining good credit. Whatever your holiday plans are this year, it’s important to make your finances a priority. This means you should focus on how to maintain good credit, which can reduce your stress and leave you free to enjoy the season.
If you have questions about buying or refinancing your mortgage, get in touch with me!