Post Holiday Credit and Budget Checklist

Now that the gifts are unwrapped, carols sung, and the tree and decorations have been put away, it's time to check your credit and create a budget to pay off the holiday debt. During the holidays households typically use their credit cards at a multitude of stores as well as to make on-line purchases. Just remember, the more times you use your credit card(s), the greater the opportunity for identity theft to occur. Below is a list of steps that can be taken to check your credit and create a budget to pay back the debt racked up over the holidays.

• Request a free copy of your credit report from each of the 3 main credit agencies (TransUnion, Experian, and Equifax). Credit reports can be requested online from annualcreditreport.com. You are legally entitled to one free credit report yearly from each credit agency.

• Thoroughly review the credit report(s) for any errors or discrepancies. You can request the credit bureau correct any errors or dispute any derogatory or inaccurate accounts. If the creditor who put the derogatory credit on your credit report cannot provide evidence that you owe the debt, it should be removed from your report.

• To create your budget, you will need to collect your pay stubs, bank statements, insurance bills, utility bills, and any other documentation that shows your monthly expenses.

• Determine your monthly income after taxes. If you receive a salary or hourly rate and work 40 hours every week this will be simple, if you receive commission or your income varies week by week you may want to take an average of your last year's income to create your budget.

• To create your monthly budget use a software program or write out your budget on a worksheet. Break down your income and expenses line by line to give you a better picture of where your money is going and where you can cut expenses and save money. Account for your mortgage payment first in your budget. Try to budget no more than a third (33.3%) of your gross income on rent. Your gross income is before taxes, whereas net income is how much you make after taxes, or your take-home pay.

• Adjust your expenses, if necessary. Total your income and expenses -- hopefully, you'll find that your income is higher. If so, decide what to do with your extra income, whether it's putting more money into savings or paying off a credit card. If your expenses are higher, decide which expenses you can lower or eliminate.

You have now successfully checked your credit and created a budget. Review your budget each month to see if you have stayed on track and make changes as necessary. As your income or expenses change, be sure to adjust your budget accordingly. The goal is to spend less than you earn. It is also a good idea to review your tri-merged credit report (Transunion, Equifax, & Experian) semi-annually to check for errors and identity theft.

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