Healthier spending habits begin with honesty

This was originally published on Monday, March 14 ,2016 in the Pacific Daily News.  Click here to subscribe to the PDN.

Some people choose to ignore when they are in financial trouble until they can no longer ignore it. There are some signs to look out for when considering if you are starting to get into financial troubles.

Here are several questions to consider:

Are you using your credit card for everyday basics? Does going to the grocery store make you anxious because you may not have enough money? Do you go to the gas station without enough money in your checking account? If you find yourself constantly short of money for the basic necessities, you are living paycheck to paycheck. This is a stressful place to be and is not good for you financially, mentally or physically. Unfortunately, many people find themselves here. Review your spending habits. Is there any place you can cut back? You may realize that you might have to re-evaluate your living situation. This may mean finding a new job, taking on a second job or even relocating.

Do you pay only the minimum or less than the minimum amount on your credit cards? Although it may keep the creditors from contacting you to pay your bills, it really does hurt you in the long run. This habit will never pay down your debt. Instead it prolongs the time you have to pay which in turn adds interest to your balance inflating the amount you must pay back.

Do you use your credit card for cash advances? Read your credit card statement. You will be surprised how much more interest is charged for cash advances than for using your card for a purchase transaction.

Are your credit card balances near the maximum limit? Do you max out your credit card, make a payment then use it again? This is a cycle that can become hard to exit.

Do you hide your purchases from your spouse or significant other? This is usually associated with the guilt of purchasing an item knowing that you are struggling to make ends meet.

Be honest about your spending and credit habits. Occasionally, we may get by doing this a few times. If you catch yourself in several of these instances, you should consider making some changes. If you see the warning signs, take a serious look at your budget and spending patterns. Search for the reasons you are where you are. It could be because you are between jobs or it could be that you need help managing money. Don’t feel that all is lost and just give up. There are steps you can take to start repairing your finances.

The most important thing is, don’t wait until there is a huge problem. Start trying to change how you are managing your money. Let the people around you know that you are making the change. They can be your biggest support system. If you really feel you need some help, talk to a professional financial counselor. A finance counselor can help you plot a course that will get you back on the right track.

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 http://www.moneymattersguam.wordpress.com.

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