What better time to be budget-conscious and focus on your finances than the holidays? That statement is comparable to “I plan on losing 20lbs between November 21st and December 31st.” In all actuality, if you focus, concentrate, and hit your marks or goals during times considered to be impossible and can apply that same focus and concentration during the easy times, it will ensure you can hit your mark and achieve your goals. If you say to yourself during the holiday season, ” I am going to curb overeating and not devour Aunt Suzy’s entire pumpkin pie or every candy cane in the house, you will notice your body’s natural reaction toward eating a lot is controlled. Similarly, if you can contain spending, minimize debit spending, and use cash only during the holiday shopping madness and not fall prey to “you can’t pass this deal up” or “BOGO,” you have basically beat the system and won the marathon. You have trained your mind and Christmas spirit that you have a budget and won’t overspend on that budget. Overcoming obstacles during a time of challenge creates strength.
So, let’s get serious for a moment before we start decking the halls with Holly. I can offer two pieces of advice that I have also offered to family and friends. First, your credit score matters, and second, save your cash and contribute to your 401K (as much as possible). The better the credit, the better the finance, and the less you pay for your loan and that financing. Your credit score for major purchases such as a house is very important. On a mortgage note, the mid-credit score of the primary wage earner is what helps derive the interest rate. A mortgage company pulls what is called a tri-merge credit report. The three credit bureaus utilize independent algorithms (albeit outdated) to determine your credit scores. Those algorithms are based on many attributes, such as balance-to-limit ratio, the length of time a liability has been opened, and payment history. The balance-to-limit ratio is a significant component of your credit score, so the more you charge, the closer to your limit you get and the lower your credit score falls.
