Budgeting in a Spending Season

Thanksgiving is over and the giving season has just begun. Today's unofficial holiday, Black Friday, kicks off the holiday shopping season with a wide variety of retailers offering huge savings on high ticket items. Unlike the tamer Thanksgiving week traditions, such as the Macys Thanksgiving day parade or the traditional Thanksgiving feast, Black Friday is marked by epic lines at local stores and chaotic masses of shoppers, many of whom are willing to wake up before dawn for doorbuster deals and prime access to the soon to be out-of-stock sale items.

It's hard to remember anything when you're rolling out of bed at 5am, still drowsy from last night's turkey paired with a lack of shut-eye. But it's especially hard to remember your budget. Maybe that budget amnesia accounts for these poll results: according to the Washington Post, half of the respondents to a poll early last year said they would carry their holiday credit card debt into spring. And this was before the current economic slump. So how do you stop yourself from overspending this holiday season? Why not give yourself a few gifts before you start shopping for everyone else:

Gift 1: A Budget
I know, it's scary. When there are people to shop for, holidays parties to attend, even holiday parties to throw, you may not want to have your financial reality mapped out in front of you when you could have a piece of pie and a healthy slice of ignorance instead. But soon enough it will be January, the month of New Years resolutions and no more holiday splurge excuses. So why not get a head start and make a budget now? Include holiday gifts and get a better idea of how much you can spend this holiday season. You can use WISER's budget worksheet to get you started. For help on keeping track of your spending, check out WISER's "Keep Track of Your Spending" Fact Sheet.

Gift 2: A Low-Interest Credit Card
Look for low-rate and no annual fee credit cards. You can get a list of credit cards, interest rates and fees: send $5 to RAM Research’s CardTrak, P.O. Box 1916, Frederick, MD 21702, or for free on the Internet at http://www.ramresearch.com/. See also the http://www.cardtrack.com/ website .

Gift 3:A Free Credit Report
Get a better idea of your credit situation, for free! As of September 2005, all US Citizens are eligible for one free credit report from each credit agency per year. To receive your free annual credit report visit www.annualcreditreport.com or call 1-877-322-8228. This can help you improve your credit and set some long term financial goals.

Gift Trapped? [Washington Post]
Tips for Reining in Holiday Giving [Washington Post]

Free Credit Reports: More Than a Catchy Jingle

If you've turned on your television recently, you've probably encountered commercials featuring the musical stylings of a certain free credit report website's spokesman. The songs pitch a seemingly great deal---free, personalized credit reports, just a click away! Though these dittys may be alarmingly infectious, their pitch raises some questions. Like what is a credit report? What do the numbers mean? What do they usually cost?

What is in a Credit Report?
A credit report includes the following:

• All of the times you have borrowed money, the date, the credit limit and a history of how you have paid the money back
• A list of late payments that were 30, 60, 90 or 120 plus days late
• Any bankruptcies and tax liens,
• Each time that a creditor or potential lender has made an inquiry about you when the lender was deciding whether to give you credit, and
• Overdue payments that have been referred to a collection agency.

Bankruptcy stays on your credit history for 10 years and other negative information remains on your credit history for seven years. Credit inquiries stay on your credit history for two years.

What is a Credit Score?
A credit score uses a number between 300 and 850 to inform creditors and lenders of how reliable you are when it comes to paying off your debts based on the information from your credit report.


How can I get a free credit report?
As of September 2005, all US Citizens are eligible for one free credit report from each credit agency per year. To receive your free annual credit report visit www.annualcreditreport.com or call 1-877-322-8228.

You can also get a copy of your report for free anytime if:

1. You have been denied credit for any reason and a credit report was used in making the decision. You have 60 days to mail proof of rejection to the reporting credit bureau;
2. You are unemployed, actively seeking employment, or if an employer or potential employer has requested a credit report;
3. You are receiving public welfare assistance; or
4. You believe your credit report has been used to perpetrate a fraud.

A poor credit record can affect your ability to borrow money to pay for a car or an education, rent an apartment, buy a house or even get a job. Check your credit report once a year for errors or problems and write to the credit agencies to fix the errors or to insert a statement of explanation.