Five ways to prepare your finances to face 2016

Before long, the hectic holiday season will be behind us and we’ll be facing a new year filled with fresh opportunities to improve our credit and learn from last year’s mistakes.

Sound cheesy? Perhaps.

But in all seriousness, it wouldn’t hurt to end 2015 on a positive note by making the commitment to pay attention to your credit standing and behavior. Heck, it might actually be easier than those overly optimistic health and fitness resolutions.

Here are five straightforward steps we can all take to prepare our credit profiles for 2016:

1. Pay off credit card debt.
If you are spending more than you can afford this holiday season, it’s probably going on credit cards.

You can avoid carrying holiday card debt into 2016 by paying it down as you go instead of waiting for a hefty total when your card statements arrive in January. If you really can’t pay your balances down before the new year, strive to get as much of it under control as you can — especially the debt on higher interest cards.

Even if you aren’t overcharging this time of year, it will help to pay it all off ASAP. Variable interest rate APRs (which means most credit card APRs) will rise when the Federal Reserve starts raising its benchmark interest rate, possibly as early as next week. The first rate increase may not be large, but there’s no sense in letting a card balance become more costly than it was in the first place. Pay card debt off now.

2. Revisit debt repayment strategies.
If you’re feeling stuck in a debt rut, it might be time to change up your repayment plan. For starters, take a serious look at your budget to see if you can put a bit more money toward your debt each month, even if it’s just an extra $25-$50. Every little bit counts!

If you’re overwhelmed by your debt in general, see if there’s a fresh way to look at the challenge so you don’t start the year too financially stressed.  

3. Check your credit report and score.
If you haven’t recently done so, pull a free copy of your credit report from one of the major credit bureaus via annualcreditreport.com. Check the report for inaccuracies and fraud, and if you see something wrong or misreported, start a dispute process immediately. The sooner you catch a case of identity theft, the less damage the fraudster can do.

Reviewing your credit report will also let you see a list of all your credit accounts, debts and financial history. Couple that information with your credit score, and you can set goals for the upcoming year. Maybe you want to lower your credit utilization ratio by paying off a lingering card balance, which should improve your credit score. 

Credit reports can also encourage good credit behaviors. I just reviewed my Equifax credit report and was pleasantly surprised to see how much of my car loan I paid down in 2015. I hadn’t checked the balance recently and my credit report showed my hard work is paying off.

4. Evaluate card use.
Do you consistently charge more than you can afford? Are you using a rewards card, but not actually redeeming rewards? Or, are you avoiding credit cards completely? If you answer “Yes” to any of these questions, you should revisit your credit card practices. Overspending can drive you into perpetual, interest-laden debt; bypassing rewards is like giving up freebies; and not using credit cards means you’re avoiding a simple way to build credit.

Acknowledge the areas that need improvement and make a simple plan to change them. For example, use a cash-back card more instead of a general purpose, nonrewards card, so you can get paid for using a credit card. I did this for “No nonsense-spending November” and racked up nearly $70 in cash-back rewards.

Or, if overspending is your problem, remove auto-saved credit card details in online shopping accounts and keep only one card in your wallet instead of a handful to reduce spending temptations.

5. Consider your giving to your local church.

Giving in the New Testament does consist of money (keep in mind that it is not LIMITED to money).  New Testament giving is Spirit-led and involves free-will offerings.  Free-will offerings are always voluntary.

Throughout his letters, the Apostle Paul never commands the Christian believer to give money nor is there a command to give specific amounts of money.  Christian believers are encouraged to give voluntarily, according to the Spirit, and within their means (ability to give).

Even though the churches in Macedonia gave beyond what was expected, they did it because it was in their heart to do so.  They did not do it because a religious leader pressured or manipulated them into giving.  When you consider your financial giving to the church just be sure that you give - not because someone has pressured you into giving your hard earned money - but because of a heart of gratitude we should have to God. who gave to us our salvation and the power and purpose for life.  

I know a person who shared with me that they hated it when I spoke about tithing.  They considered it an Old Testament law not under the New Testament grace.  When they translated the tithing into faithful, routine giving of their fiances to the Lord through their local church. they said to me "It seems like I never run out of money.  Every time I think things are getting "tight" financially, God sends a blessing of finances to me that I did not expect. God is faithful to provide as we trust in Him!