Survive the holidays — on a budget

This was originally published on Monday, October 16, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

I saw holiday decorations in stores as early as Sept. 25. It’s October and starting next month the holidays will be upon us once again. Unfortunately, for many, the most wonderful time of the year has become less about spending quality time with loved ones and more about overscheduling and overspending.

The hustle and bustle can cause anxiety and stress as we search for the perfect gifts, party attire, and festive decors, especially if money was tight before the holidays started. But you can survive the holidays and not completely break the bank.

  • Start early. There’s no better time than the present to start putting money aside for the holidays. The earlier, the better. Open a holiday savings account that you can deposit money in all year round. You may not be able to use it this holiday season, but it will be ready for next year’s holiday shopping.
  • Spending plan. Decide how much you can afford this year and stick to it. This should include gifts, food, party plans, wrapping paper, décor, postage, extra fuel for running around and energy costs. After you decide on your budget, start making your list of people you will be buying gifts for and how much you intend to spend on each of them. Don’t forget to purchase a few small gifts for surprise visitors and last-minute parties. Keep this list with you to help you stay on track while shopping.
  • Shop early. Don’t wait until the very last minute to buy presents or you may end up unintentionally overspending or buying items you don’t necessarily need. Having extra time to compare prices is especially helpful when buying big-ticket items such as electronics or even a new bicycle. There’s nothing worse than buying a gift at full price, only to see that another retailer is selling it cheaper.

Before you hit the stores, do your homework and compare prices for the gifts you know you want to buy. From newspaper ads to online shopping that offers free shipping and other holiday deals, do your research and create a “plan of attack” to help your money work harder for you.

  • Don’t forget about you. Why not? You earned it. While out and about, take some time to splurge on you. It could be a little something you have been eyeing for months — a new party dress, a moment of peace at the movies.
  • Pay cash. Take out a set limit from your account and use it to make all your holiday purchases. Once you run out, that’s it — the money is gone and your shopping time is done.
  • Credit cards. If you do use your credit cards, think of it as a short-term loan that you will pay off in a month or two. Use the card with the lowest interest rate. Keep track of what you spend so it’s easier to get caught up on holiday spending.
  • Shop online. It’s fast and easy, and you can easily comparison shop. By ordering from the comforts of your own home, you also resist extra temptations like eating out or making impulse purchases.
  • Get creative. Handmade gifts can be a special treat in this age of store-bought presents. Incorporate your own talents like baking cookies, creating a photo album or decorating a picture frame, knitting a blanket or scarf. If your skills don’t translate into a gift basket, create a holiday coupon for a free oil change, lawn cutting, house cleaning or car wash. My kids gave me “certificates” such as these for Father’s Day. I thought it was a great idea and it was much appreciated.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

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Stay alert for identity theft

This was originally published on Monday, October 10, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

With security breaches becoming more prevalent and with most of our identities being stored online, it’s imperative that you stay alert for identity theft. Identity theft can ruin your credit score and can cost you money if you do not catch it early.

If you do become a victim of identity theft, act quickly to start repairing the damage. The sooner you act, the better chance you have to minimize the loss of financial accounts and to repair your identity.

Contact the Federal Trade Commission and report that you are a victim of identity theft. You can do this online by going to http://www.consumer.ftc.gov. You can also call toll free at 1-877-ID THEFT (1-877-438-4338) or contact them by mail at Consumer Response Center, FTC, 600 Pennsylvania Avenue, N.W., Washington, D.C., 20580.

Place an initial fraud alert with one of the three national credit reporting companies. You only need to contact one. By law, the credit monitoring agencies must share with the other two companies. A fraud alert will last for 90 days and can be extended once a police report is filled. The fraud alert will make it harder for the thief to open more accounts under your name and is best for those who are unsure if their identity has stolen.

  • Equifax: Call 1-800-525-6285 or write to P.O. Box 740250, Atlanta, GA, 30374-0250.
  • Experian: Call 1-888-EXPERIAN or 1-888-397-3742, fax to 1-800-301-7196, or write to P.O. Box 1017, Allen, TX, 75013.
  • Trans Union: Call 1-800-680-7289 or write to P.O. Box 6790, Fullerton, CA, 92634.

Order a copy of your credit report. When you place an initial fraud alert, you are entitled to a free credit report even if you had requested a free one in the last year.

Contact the companies at which your account has been tampered. Send a letter explaining the identification theft. Send the letter by certified mail and ask for a receipt. Dispute any errors on the account.

Create an identity theft report by filing a complaint with the Federal Trade Commission and print your identity theft affidavit. Take the affidavit to the police and file a report. Your identity theft affidavit and police report make your identity theft report.

Contact the Department of Revenue and Taxation to report violations if you believe that your identity theft may impact your taxes.

Contact the Social Security Administration if you feel that your Social Security number is in jeopardy or was compromised. You may need to request for a new number.

Contact the Postal Inspection Service to change your address if you believe your identity theft happened by mail.

Contact your banking institutions as soon as possible. If the theft happened due to a lost or stolen credit card or ATM card, you will need to get a police report stating what happened before going to the institution. You should go through all your account statements and search for any unauthorized or suspicious activity.

Keep records of all your communications. If you fax or mail documents, be sure to get confirmation that you sent the documents and that the company received the documents. It may take a while to get your finances back in order after the crime. You should change all of your online passwords and debit/credit card PINs.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

Was your Equifax data compromised?

This was originally published on Monday, October 3, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

On July 29, 2017, Equifax discovered that criminals exploited its website applications. Equifax is one of three national credit monitoring companies. According to Equifax, the breach occurred from mid-May through July 2017.

Equifax’s website states “Most of the consumer information accessed included names, Social Security numbers, birth dates, addresses, and in some instances, driver’s license numbers. In addition, credit card numbers for approximately 209,000 consumers and certain dispute documents, which included personal identifying information, for approximately 182,000 consumers were accessed. Equifax will send direct mail notices to consumers whose credit card numbers or dispute documents with personal identifying information were impacted. We have found no evidence of unauthorized access to Equifax’s core consumer or commercial credit reporting databases.”

If you want to know if your information has been compromised by Equifax’s breach go to http://www.equifaxsecurity2017.com. Since you will be using personal information, be sure you are on a secure computer with an encrypted network connection. Once on the site:

  • Click on the “Potential Impact” tab.
  • Enter your last name and the last six digits of your Social Security number.
  • a message will inform you whether you have been impacted.
  • along with the opportunity to investigate if your personal information was breached, Equifax is offering anyone with a Social Security number enrollment into TrustedID Premier till Nov. 21, 2017.

TrustedID Premier offers credit file monitoring and identity theft protection by:

  • monitoring your credit score on all three credit monitoring sites — Equifax, TransUnion and Experian — with automated alerts of key changes;
  • providing you copies of your Equifax credit report;
  • placmng a credit lock on your Equifax credit report to prevent access by third parties (there are a few exceptions);
  • monitoring your Social Security number by scanning internet sites where consumers’ personal information is suspected of being bought and sold; and
  • providing up to $1 million in ID theft insurance to help pay for certain out-of-pocket expenses in the event you are a victim of identity theft.

The Federal Trade Commission’s website, http://www.consumer.ftc.gov, suggests that you can also do the following to help protect yourself after a data breach:

  • Check your credit reports. Check reports from Equifax, Experian, and TransUnion for free by visiting http://www.annualcreditreport.com. Accounts or activity that you don’t recognize could indicate identity theft.
  • Consider placing a credit freeze on your files. A credit freeze makes it harder for someone to open a new account in your name. Keep in mind that a credit freeze won’t prevent a thief from making charges to your existing accounts.
  • Monitor your existing credit card and bank accounts.
  • Consider placing a fraud alert on your files. If you decide to put a credit freeze on your files, a fraud alert will warn creditors that you may be an identity theft victim and that they should verify that anyone seeking credit in your name really is you.
  • File your taxes early. Do it as soon as you have the tax information you need, before a scammer can.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

Many ways to invest your money

This was originally published on Monday, September 25, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

There are many types of investments and investing styles to choose. Which you choose depends on your goals. The best portfolio is a diverse one. Here are some investments that may interest you.

Bank products. Banks, credit unions and financial institutions usually provide the safest and most convenient investments. Savings accounts usually have a higher interest rates than a checking account. Money market accounts earn slightly more than a savings account and sometimes have a limit on withdrawals. Money Certificates and Certificates of Deposits earn more than your traditional savings account. These products are not risky and therefore do not earn a lot of interest.

Bonds. A bond is a loan you give to a government, a federal agency, corporation or other organization in exchange for interest payments over a term plus the original amount loaned. There are a wide variety of bonds. The most popular are Treasuries through the federal government. Some bonds fluctuate like the stock market. The risk of the bond depends on the type of bond.

Stocks. Stocks are a piece of ownership of a corporation. The money you make or lose depends on how well the company performs and the type of stock you own. Another factor is the how well the stock market performs.

Investment funds. Many investors pool their money with a specific strategy of how they will earn money. They can feature a wide variety of investment plans. Publicly offered funds must be registered with the Securities and Exchange Commission. These include mutual funds and exchanged-traded funds. Hedge funds are private and are usually exempt from registering with the SEC.

Annuities. An annuity is a contract between an insurance company and the investor. The insurance company makes periodical payments. The most common annuities are fixed and variable. They are usually tax-deferred but do have certain fees and expenses including high commissions.

Retirement. There are several ways to save for retirement and manage the income once you retire. The most popular are a 401(k) and the Individual Retirement Arrangements. Both offer tax benefits and compound your investment over time. Many larger companies offer retirement plans in which they match your contributions to a certain percentage.

Insurance. Life insurance products should be included in a financial plan. There are many forms and variations. They are usually used to meet a specific goal as you age and can be quite complex. Some of the most popular are term life, whole life, and universal life.

Real estate. Buying real estate as an investment has grown in popularity. Turn to any home improvement channel and you will find numerous shows on flipping property. Depending on the rental or selling market it can be quite lucrative. Renting real estate can be quite labor intensive and may require a security net between renters if you have a mortgage to pay on the property.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

Before investing, know risk tolerance

This was originally published on Monday, September 18, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Q: I am looking to start investing my money other than just in my savings account at my bank. I am not sure where to start or where to invest. Do you have tips for a first-time investor?

Banks and credit unions are a safe risk, but returns aren’t as high as other types of investments. The general rule is the higher the risk, the higher the return. If a return higher than a bank, credit union or financial institution is what you seek, I recommend you first identify your tolerance for risk. That will determine how you invest your hard-earned savings.

Have a plan. Ask yourself a few questions. How much can I invest? Can I afford to lose money? What is my goal? How long do I want to take to reach my goal? What type of investment do I want?

Risk tolerance. The website thebalance.com describes risk tolerance as an investing term relating to the amount of market risk, especially the volatility (ups and downs), an investor can tolerate. Understanding your risk tolerance is an important component in investing. Have a realistic conception of your ability to take a risk. Are you able to handle the loss without panicking and selling at the wrong time?

Taxes. Most people start an investment with a small amount of money and grow it over a period of time. Consider investing in a tax-efficient plan like a pension plan. How much tax you pay upfront or at the end makes a huge difference. Know how your money is going to be taxed when you open up the account.

Diversify. Consider putting your money in different types of plans. Different markets rise and fall and having your money in different types of markets and plans will help balance the losses. Diversification reduces the risk of your portfolio from being completely wiped out by a single event and is the best defense against a financial crisis.

Do your research. The internet and media are full of tips on how to grow your investment faster. Talk to a certified investment counselor at a reputable institution. They will be able to guide you and help your investment grow. Remember the old adage: “If it sounds too good to be true, it probably is.”

Invest regularly. Investing a little here and there can be more beneficial than investing lump sums less frequently. It takes advantage of compound interest. Compound interest is based on the interest made based on the amount invested. The more invested, the more it earns.

Review. Look at your investments quarterly and at the end of the year. Don’t be so quick to move your money around or sell. Most trends need time. If you constantly review your portfolio, you become anxious and do something you may regret later. By evaluating it over time, you can get a sense of how well or poorly your investment behaves. As different funds change, it will affect the overall risk tolerance of your portfolio.

Stick to your plan. Unless your goals change, stick to your plan. If you have concerns, seek guidance from a professional. Know what you are comfortable with. Investing is best when it is easy and stress free.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

College decisions impact financial future

This was originally published on Monday, September 11, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Many college students do not realize that their financial performance in college will impact them long after they graduate. Decisions they make on using their credit cards, financial aid, and over spending can impact their job search, their credit score, and their ability to payback what they borrowed.

Getting a good financial start out of college will ease the stress of the transition and open many more opportunities.

Failing classes. For many years your child has had a structured learning environment. They go to school and follow a strict schedule. After school, parents enforce homework and studying times.

College is very different from what they have been accustomed. Many professors don’t expect students to be in class every session and depending on their course load they may have a lot of time that they may consider free. Socializing is also a big part of the college experience. This new freedom could lead to academic troubles and financial troubles.

Retaking a class is expensive and could prolong their time in college. If it becomes a trend, they may be put on academic probation or worse, expelled. There may be fees associated with failing a class and loss of scholarships and/or grants. Being accepted by another college will become difficult. Student loans still must be paid off even though they are not in college.

Scholarship and grants. Being a student in college doesn’t mean they cannot continue to look for other scholarships and grants. Most believe that scholarships and grants are just for high school seniors going into college. In fact, there are many scholarship and grants that are targeted to students who are currently in college.

Have them speak with their academic adviser or counselor about these opportunities. They can also do some research online. Even if the amount is small or pays for certain expenses such as books, these opportunities can be a huge help. There is no rule to how many scholarships or grants you receive.

The more assistance you get the less you will have to pay or borrow.

Inappropriate use of assistance. Most scholarships or grants are paid directly to the school. But some are not and many student loans are paid directly to the student. This is very tempting to use unwisely. This money should not be used to fund a spring break trip.

Many students do not understand that paying for these loans right out of college is difficult. Most college students won’t be earning six-figure salaries at their first job; many of us don’t reach that level of income during our careers.

Large student loans. College tuition has been on the rise for years and it does not look like it will be leveling off any time soon. Many parents can no longer afford college tuition, living expenses, books and other incurred financial education related expenses.

Student loans are becoming a more popular way to fund higher education with the students being solely responsible. With that in mind, students should consider the cost of their education. Choosing a more affordable college in an area with lower living costs will certainly lower their debt. Be sure to understand the terms of the loan be for accepting it.

Even though your child is still in college, advise them to make monthly payments to keep the accrued interest from growing too large. The sooner they pay on the loan the better.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

Talk to students about budgeting, credit cards

This was originally published on Monday, September 4, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Question: Our son is starting college off island this September. We have set him up with a new checking account and a credit card. He will be living in the dorms and is hoping to find a part-time job on campus. This is his first time living on his own and we want to ensure that he starts his financial well-being on the right track. Do you have any suggestions to offer that we can discuss with him?

Answer: I am thrilled to see that you are being proactive with your son’s financial well-being before sending him off into the real world. Many parents do not discuss this important topic with their new college students and many students leave college with a lot of debt and sometimes ruined credit scores. Managing their finances without a parent’s close supervision can be exhilarating and intimidating.

No budget. This is a mistake practiced by many adults It is because they have not made budgeting a financial habit. Learning this vital skill and making it a habit early in life will certainly help your college student beyond the college years.

Most students often have limited or sporadic income. It is easy to waste money on unnecessary items if they do not carefully track their spending. Sit down with your college student and show them how to create a budget. Inform them that they will have to revise this as their income and expenditures change.

Give them an understanding of needs versus wants and that they may have to be more frugal. Teach them about using coupons and how to take advantage of sales and looking for the best buys. Most millennials are tech savvy and downloading one of the many smartphone apps will make this task much easier.

Not planning. Many students get to college not certain on their major or they decide to change majors. Sit down with your college student and create a plan on how many credits a semester they need to take to graduate on time. Talk about ways that they can expedite their time in college by taking classes during the summer and winter breaks.

Also remind them that senior year will be more expensive with graduation fees and senior projects.

Peer pressure. Living on their own without parental supervision leaves them open for all sorts pf peer pressure. With their newfound independence, some students can get into financial trouble trying to keep up with their friends, who may not be financially savvy or have a larger spending limit from their parents. They may be pressured into eating out more often, buying more clothing than they need, going out on the weekends or planning a costly vacation during their breaks.

Talk to them about how to handle peer pressure and that they should not be concerned how others perceive them by being more financially responsible.

Credit cards. Help your college student understand the pitfalls of using credit unwisely. Credit cards have become a way of life and makes obtaining things extremely easy. Credit card debt that is created in college years can affect their credit score for years after college.

They are just starting their credit history. Many credit cards will offer them high interest rates and hard-to-meet terms. Explain to them how interest works and that making minimum payments each month prolongs the payoff making it much more expensive than the initial cost of the items.

Credit cards can help them build their credit history and improve their credit scores, if used wisely.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.