Managing your credit score is an extremely important part of financial planning, especially if you want to apply for new credit, a loan at a low interest rate, or purchase a home. Good credit also allows you to have more negotiating power to lower your interest rate on a new loan or credit card, gets you approved for higher limits, and makes approval for a car, home, or rental much more easily. Additionally, good credit gets you better car insurance rates, helps you avoid security deposits on utilities, and gives you something to feel secure about.
Create a Debt Repayment Plan
While assessing your budget, find out the maximum amount you can put towards paying off your credit card debt and loans. Paying just the minimum payment will not make much of a dent in your balance, especially if it is high. Often times the minimum payment is equal to the amount of dollars charged to your account for having a high balance. Try to cut off the debt sooner rather than later, but don’t pay so much that you have to continue using your credit card to cover purchases.
Check Your Bank Statement
One of the first steps to improving your financial standing is to examine your checking and credit card statements to make sure there are no errors. If any errors are found, report them and have them resolved as soon as possible. The holiday rush is the most common time for transaction errors and credit card fraud, so be sure to check your credit report for any such mistakes. Once that has been cleared up, you can begin creating a plan to pay off your debt.
Set a Budget and Change Your Spending Habits
Making adjustments to your everyday spending is a guaranteed way to improve your financial situation as long as you are putting money aside to pay off debts. Simple changes can make a huge difference such as cooking meals instead of buying dinner or learning how to do essential skills instead of paying someone to do them for you (e.g. changing the oil in your car). You can also work out at home using YouTube videos, instead of paying for an expensive monthly gym membership, unplug electronics and turn off lights when they are not in use, or seek free entertainment like vising the public library or exploring the outdoors.
Set Your Holiday Budgets a Year Ahead
Being proactive with your finances is never a bad idea. Now is the perfect time to make a holiday shopping budget and start setting aside money dedicated to your holiday gift purchases. By saving an amount as small as $50.00 a month, you’ll be piling up money to put toward holiday gifts and travel in no time. The more you can pay in cash from what you have set aside, the less credit debt you’ll have to worry about in December.
Improve Your Financial Standing
A good tip to improve your financial standing is to check your credit report and find out your credit score to see where you stand and how your spending during the last holiday affected it. When you are using your credit card often, it is important to make sure your credit report is accurate. Once you have paid down your debt, you can get another score to see what has changed.
Let LUSO Federal Credit Union Help You Manage Your Accounts
Getting out of debt can be a daunting and discouraging task, and if you’ve struggled with managing your finances you may be ready for some professional help. At LUSO Federal Credit Union, our professionals can help you understand your financial situation, create a budget, cut down your debt, and increase your savings accounts for added security and control over your money. We are a not-for-profit, member-owned financial cooperative dedicated to providing our members with quality financial services and products. We pride ourselves on serving the financial needs of our members and helping them manage their finances such as credit card debt, or lowering bank service fees. Our services and rates are available in Wilbraham, and Ludlow, Massachusetts. Contact us at our Ludlow branch at 1-(844) 587-6328 or our Wilbraham branch at 1-(800) 808-5876 to learn more.