Live & Learn
All I want for Christmas is a Good Credit Score

Contributed by Credit Bureau (Singapore)

The wonderful time of the year is here to grace Singapore once again – the custom of giving presents at Christmas. Many tend to get into the giving spirit, regardless of monetary constraints. You may find yourself tempted to do the same and possibly overspend, as you prepare for the upcoming festivity. So, how can we spend within our means and better still, enjoy the best out of it? Here are some tips on how to make the festive season a frugal yet fulfilling one.


1. Prepare a budget

There is a natural tendency that you may end up making impulsive buys and unplanned purchases without preparing a budget for Christmas. This gives an illusion of having no limits – and no limits often lead to credit card bills that hurt in the months to come. Prepare a budget of your expenses and more importantly, stick to that list. You do not want to find yourself repaying the debts created in the next quarter of the New Year.  

With a budget in place, prepare a name list and be honest with yourself about how much money you can responsibly spend on each person this year. Remember, plan for affordability and not desirability. This will enable your dollar to be stretched further when you are realistic about how much money you have in the first place.


2. Monitor the plastic

Limit your purchases to one or two credit cards so that it is easier to keep track of your purchases and avoid going over your budget for Christmas. Also, monitor your credit card statement due date so that you are well aware of the payment due. Once the item has been purchased for someone, cross it off your list so that you do not keep buying. Stick to a spending limit and exercise self-discipline. Do not incur credit card charges that you cannot pay off and damage your credit score. 

A percentage of your credit score is based on the credit owed/ used, thus it is important to pay down your outstanding balances and loans to maintain a good credit reputation. Your score is a reflective behaviour of your repayment history and it changes gradually as you change the way you handle credit. For example, a good credit score is derived from paying your credit card bills on time, all the time. 


3. Shop Early

Set a timeline as the earlier you start shopping, the more money you are likely going to save. Your expenses are spread out, and you will have more time to shop for good deals. When time is on your side, you will not be put in situations where you have to settle for items above your budgeted costs. This can make the whole experience less stressful as you are taking the rush out of the upcoming festivities and enjoy them without being stressed over finding all of your gifts in time.

At the end of the day, how much you give depends on your means. Tailor-made your budget plan to suit your needs and spend within your means. Do what’s best for your finances. After all, it’s the thought that matters.