New Year’s Resolution? New Credit Attitude.

Try as we might, only about 9.2% of us ever actually achieve our New Year’s resolutions. Everyone starts with good intentions. But life gets in the way…we get busy…and before you know it – we’ve fallen back into old habits.  According to the Inc. website, saving money/improving personal finances is always in the Top 5 resolutions Americans make every year.

That also means it’s in the Top 5 resolutions that we don’t achieve. Every year.

Time to break that cycle. For 2020, do not – repeat DO NOT – make hard-core, do-or-die New Year’s resolutions. Instead go into the new year with a “new credit attitude” geared to making “financial adjustments”. Take a breath, hit the reset button and use this time to map out smaller, realistic goals that build on each other.

Adopt a new credit attitude for January, February and March.

Armed with a new credit attitude, this plan to reduce your debt and improve/protect your long-term credit scores is achievable. Bonus: Taking action to understand and strengthen your financial health can reduce those painful financial surprises that cause stress and worry every month. Let’s do it!

Goal 1: Get Real with Where You Stand

This month, face the music and review all 3 of your credit reports and credit scores from TransUnion®, Equifax® and Experian®. It might not be as ugly as you think, and even if it is you will have a realistic understanding of what to expect in 2020. Once you have a clear picture, use your new credit attitude to brainstorm creative ways to pay down your credit debt and help raise your scores. Review all three reports together, regularly throughout the year so you can see where you are improving. Timeframe: January.

Goal 2: Get an App for That

It’s hard to manage your money when the bills are at home and you are out living your life. So, take your financial goals with you, via a smartphone app. Ask your bank or credit union if they have a free one, or can suggest good ones to try out. Find an app where you can set your monthly spending limits and the app can help you manage them. Link your app to your accounts if you can, so it can automatically track your spending every month – and alert you before you overspend. Timeframe: January.

Goal 3: Get Your Month in Synch

Instead of just winging it every month when the bills show up, put your new credit attitude to work and plan it out! Get a clean calendar and write in when income is available every month, and approximately how much it is. Then write in when regular expenses are due every month: rent/mortgage, each utility, car payment(s), student or personal loans, etc. and approximately how much each is every month.

Now, look at the whole month and think about ways to make things smoother. Can you set up automatic payments to simplify things and help stay on track for paying on time? You can ask creditors to shift the monthly due date for an account, to make it easier every month. Can you pay a bill a few days early to use the first paycheck you receive each month? Timeframe: February

Goal 4: Pay A Little More Each Month

Gather all your credit card and store card statements. Write down each current balance, credit limit, interest rate, and monthly due date. Look at that together, and prioritize. The account(s) that are at or near their credit limits are the worst in the eyes of creditors, because the credit utilization is high.

Make your maxed out or close-to-maxed-out card(s) the priority: pay more than the minimum each month, and stop using those cards until the outstanding balances are paid down to no more than 30% of each credit limit. Even if you can only afford to pay 20 bucks more on each account every month, that’s a start. This will save you on interest charges every month, and as the balances drop you will be helping your long-term credit scores. Timeframe: February

Goal 5: Turn Up the Payments

Every time you get extra money in 2020, PUT IT TOWARD YOUR DEBT. Your income tax refund, birthday cash from a relative, cashing in your change jar. Put it all toward paying down your worst accounts. Timeframe: Year Round!

Goal 6: Turn Down the Expenses

Go back to your monthly calendar. Are there any monthly bills you can reduce by shopping around, like internet service or cell phone service? Are there monthly bills you could get rid of entirely? Now look for small ways to save on miscellaneous spending. Packing a lunch every day for work instead of eating out can save you a lot of money over the course of a year. Skip the coffee shop and brew your own flavors at home. It adds up. Timeframe: March

Start with these areas, and you CAN make 2020 the year of improving your credit debt and your long-term credit scores. Start now and you can see results by spring. And remember, it’s not about making New Year’s resolutions that are destined to be broken. It’s about adopting a new credit attitude that can serve you well from one new year to the next!

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