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Just like the stores had Easter candy out before Valentine’s Day was over, tax time is coming soon. April 15 – or 17 – thanks to that oh-so-generous government extension that was granted for the filing of 2011 returns – is only a couple months away.

For many families, tax time is not as painful as it could have been, since last minute measures were enacted to protect some tax credits that may put money in your pocket. But before you get too excited about how to spend that money, we’d like to suggest doing something painfully responsible with your tax return.

We know, the dream vacation or the new car would be a lot more fun.

But a good tax return can really help to turn a bad credit score into a good one, and taking advantage of tax time in such a practical way doesn’t mean you have to give up your dream – just postpone it for a year. You’ll not only improve your credit score, but what financing you do get the next year will cost you less because of it. And really, given how quickly tax time comes each year, the time will fly by.

Depending on the size of your return, you can either pay off some smaller credit card balances completely or you may want to pay off enough on the balance of each of your credit cards to make sure they are each at less than 50% of the limit available. There is no one measure more critical to your credit score than keeping at least 50% of the credit line free.

In the short term, your tax return might by you some fun, but in the long term, if you put it to work for you by putting the return toward your credit card balances, it can significantly change your financial future. Better credit scores mean lower interest rates, better auto insurance rates, and better refinancing options for your home. Better credit ratings can even mean getting that job versus being overlooked (except in California, where it is now illegal to use credit scores in making hiring decisions).

This tax season, invest in yourself and your financial future. And next year, you can send us a postcard from Europe as you enjoy your dream vacation that is costing you less thanks to better credit!

Christmas season revelers were singing, “Bring in the noise, bring in the funk.” Funk is right! But the aftermath – high interest rates on credit cards – bring a different kind of funk to the months of January and throughout the year. Spending on Black Friday may have sounded like a good idea at the time, but overspending is never more prevalent than at Christmas. The months following yuletide bliss can be ferocious, especially for those drowning in high interest credit card debt. It’s so easy to justify that extra credit card debt at Christmas, but recovering from the spending can take you right into the next Christmas season. It’s possible that high interest rates on credit cards may have more to do with winter depression than lack of sunshine.

While retailers coast into the new year on your Christmas purchases, you’re stuck in a midwinter depression, paying interest on the purchases you made the day after Thanksgiving. You know the problem, but here is something perhaps you do not know: Your case is not hopeless. Getting out of the winter credit card funk will take a little work, but we can help you create a plan to pay down debt quickly.

Our suggestion? Start with the card that has the highest interest rate and pay it off first. This sounds radical since some financial advisers may encourage just the opposite: paying lower balances first. However, a financial payoff plan that targets high interest rates first is a good idea. Why? Let’s say you pay off the card of lesser interest first. While you are doing so, the higher interest is piling up fast. You will pay more in the long run on a higher interest loan that is left idling on minimum payments than you would on a lower balance card. Paying off the higher interest loan will result in less total interest piled on to your debt. When the high interest loan is eliminated, you can then concentrate greatly on the lesser loan, even adding the difference paid from the higher interest loan, which is now happily paid off.

Paying off high interest credit cards can help positively affect your credit rating, especially if you get the balances on the cards under 50%. Outstanding debt accounts for 30% of your credit score, so paying off those high interest cards can make a difference.

Ovation specializes in diffusing the funk on high interest loans. Our payment tools will take the guesswork on how to get started.

We talk a lot about paying off debt and getting out from under large interest payments. Indeed, financial health and a good credit score make managing the financial surprises in life so much easier. It is important to remember though that debt isn’t the enemy – it is a tool.

Judicious use of debt is what allows us to live in a house where we can paint our walls and plant a garden instead of renting an apartment with loud neighbors and a nosy landlord. Utilizing a credit card for regular expenses you are going to make anyway and then paying off that card every month can actually improve a credit score (aka lower interest rates in the future) and rack up some frequent flier miles for a much-needed family vacation.

It is in using our available credit, being mindful of that magical 50% debt to limit ratio, and making timely and consistent payments that we get to fully utilize debt as a tool for bettering our lives. Having this tool available to us will help us ultimately realize our dreams of traveling through Africa, driving our own speedboat, or my favorite – Not ever having to pay an unreasonable bank fee again.

The question is: How do I get there? How do I turn debt around from evil dragon breathing down my neck to almighty sword available at my command?

The answer is:  It is hard work, it can take a long time, and there can be a frustrating feeling of sacrifice as we buy that used Subaru instead of a new Lexus. But consider this – Each and every one of those financially sound decisions is a building block toward financial security. Each time we opt to forego a third black sweater in the closet and instead make an extra $50 payment on a credit card, we place another solid block in the financial foundation of our life. When we make do with the computer we have for one more year and put a little extra away in savings, we secure a safety net for ourselves against the unknown.

These aren’t sacrifices – these are the stones we move to create a financial sanctuary where we are free to do as we like with our money. The three little pigs is more than a quaint children’s story, it is an allegory for how we can secure our future with some effort and frugal choices today.

Once we are in control of our finances, we have a full tool belt – sword and pet dragon included – for managing our future. Banks and credit cards will rally for our business. Car dealerships will compete for our attention with low interest rates and free extras. We will get to make our own decisions once again, and financial freedom is the ultimate reward.