How to save for Christmas?

Dear Dave,

My husband and I always save up throughout the year for Christmas. My sister, on the other hand, never saves and is maxing out her credit cards again just to buy presents for her kids. I'm worried she'll be in trouble when the bills come due.

Amy

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Dear Amy,

It still amazes me that some people seem surprised when Christmas rolls around every year on December 25th!

Planning for Christmas is just another part of the budgeting process. You know Christmas is coming, right? Spend every dollar on paper – including what you can afford to spend on gifts – before the month begins. If you stick to your budget you won't have the problem of overspending.

Your idea is just another form of the budgeting process. There's nothing wrong with setting aside a little bit each month throughout the year. Then when December rolls around, you've got a nice pile of cash laying there to buy Christmas presents!

This advice may not help her THIS year, Amy. But hopefully it will give her a great head start on next Christmas.

Dave

Can credit error prevent you from getting a loan?

Dear Dave,

Recently, I found a blemish on my credit report due to a USPS error. It’s the only mark against me. I was told by an agent that this could prevent me from getting a mortgage with their company. Is this true?

Marian

Dear Marian,

You don't have anything to worry about if that's the only negative mark on your credit report. You need to find another agent who knows what they're doing, or go to a different mortgage company.

Standard underwriting guidelines won't dictate that you can't get a mortgage if you have one late payment on your entire credit history!

Dave

How to sell a small business?

Dear Dave,

I've had my own business for a couple of years, and haven't made a profit because I've put all the revenue back into the business. I took out an equity loan of $40,000 to start up the business, and at this point I have about $40,000 worth of merchandise. Now I want to sell the business. What's the best way to sell it, and what do you think I could get for it?

Sharon

Dear Sharon,

Most small businesses sell to customers, competitors or suppliers. Look to these types of people for your transaction.

From what you tell me, your business is worth book value – about $40,000. You've never made a profit, so there's no cash flow to help increase the value of the business. Since you've been open such a short time there's really no additional value or "good will" of the business. When you turn the key and walk into the store you're surrounded by the worth of the business – merchandise and equipment.

It's really difficult to sell potential to a sophisticated buyer, Sharon. They can go out and get that on their own. Good luck!

Dave