Find where you can cut back, put those funds to better use

This article was originally published on Monday, 14 January 2013 as the Money Matters article in the Guam Pacific Daily News (PDN).  Click here to subscribe to the PDN.

Last week I outlined ways to improve your financial status.

I suggested creating New Year’s financial resolutions.

Many of these are simple and do not require a lot of time to achieve. Good discipline and saving practices also will help you accomplish some of the short- and long-term financial goals. Here are a few more suggestions:

Organize and de-clutter you financial life. Take a look at your credit card and bank statements from the past six months.

Create a spreadsheet dividing your expenses into categories (food, rent, fuel, etc.), and exclude your holiday shopping. This will give you a good snapshot of how your money is being spent. Look at the categories you can spend less on, such as dining out, unnecessary purchases, or a subscription to a magazine you never have time to read.

Once you decide where you can cut back, think about using that money to reduce your debt, save for a vacation, or invest it.

If you have several old 401(k) plans and IRAs consider consolidating them into fewer accounts. Make it as easy as possible to monitor your finances.

There are several apps you can purchase for your smartphone or tablet. Make it a habit to input your expenses daily and at the end of the month take a look at your expenses and adjust as necessary. If you make it a habit it will become second nature.

Re-evaluate your insurance. Just like planning your estate, the beginning of the year is a good time to look over your health insurance and property insurance coverage.

Look into the insurance your and/or your spouse’s employers offer. Make changes if your status has changed (married, divorced, new child, etc.). Re-evaluate your policy. Do you need more coverage or do you need to cut back on the coverage you already have? If you want to know more about life insurance, who needs it, or how much you need visit

Create an emergency fund. We cannot plan for everything. Sometimes situations arise that are beyond our control: the car breaks down or your refrigerator needs replacing. Having an emergency fund will help ease the financial strain to pay for these situations. Try to put aside about two to three months’ worth of living expenses. Have that money automatically deducted from your paycheck and into an account such as a savings or money market account. Resist the urge to use it for anything else but a dire emergency.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years 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 To read past columns visit the Money Matters blog at


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