Not too early to start holiday shopping

This was originally published on Monday, July 2, 2018, in the Pacific Daily News.  Click here to subscribe to the PDN. 

Believe it or not, the year is more than halfway through, and the holidays are just a few months away. Summer brings some great sales, such as the Fourth of July and Labor Day. Most stores are discounting stock to make room for new items. It only makes sense that you take advantage of the sales and start your holiday shopping.

Shop early. Give yourself time to compare prices; don’t wait until the last minute. Being in a crowded store on a last-minute shopping spree is tiring. If you feel exhausted, you are tempted to just buy anything regardless of the cost, which ultimately will break your budget.

Have a spending plan. Create your “nice” list by separating the list into three parts. The first tier is those closest to you, such as your parents, siblings, spouse or kids. Those in this tier are the ones you plan on spending more. Next tier consists of your close friends, your kid’s best friends, and so forth. In this tier you may not plan on spending as much as those in the top tier.

In the last tier are those that are not as close to you like co-workers, etc. For the top and middle tier, assign each person a dollar amount that you wish to spend on them. For the bottom tier, consider a homemade gift such as cookies, cupcakes or homemade jelly. Put a total amount on how much you plan on spending for those in this last tier.

Budget. How much can you set aside in your budget? Will you need to cut down on your typical monthly spending to save? Can you divert some savings from other goals to fund your holiday expenses? By looking at your budget now, you can spread holiday savings over several months, and make smaller cuts to each month. This is much more sustainable than trying to make unrealistic budget cuts in November and December.

Keep your shopping list with you. Carry it in your purse, wallet or phone. If you know what you want, you can breeze through the store without going off budget.

Be creative. There are many websites that are dedicated to making useful homemade gifts for almost nothing. Take the time and browse these easy-to-make crafts. Start making them before the busy schedule of the holidays kick in. Store-bought gifts are great, but many people appreciate the time, energy and thought put into a homemade gift much more.

Talk to family and friends about holiday spending. If you have looked at the math and realized that you won’t have as much available as you would like for holiday expenses, it can help if you talk to family and friends early. They may be in the same boat, and together you can set limits on the amounts you spend for gifts this year. You can also come up with less expensive, creative ways to enjoy the holidays together.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 24 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.

Advertisements

Tips for summer travel savings

This was originally published on Monday, June 25, 2018, in the Pacific Daily News.  Click here to subscribe to the PDN. 

Summertime vacations can be costly. If you are planning on traveling off island, you may want to consider traveling with a group of friends or even extended family.

Traveling in groups opens discounts for groups that may save you money. Group rates are offered with many hotels, amusement parks and museums. If you are planning on traveling as a group, here are a few things to consider.

Budget. Discuss a budget agreeable to everyone. It is very easy to overspend when you are having fun. By planning ahead, you will ensure a dream vacation that everyone can afford. It will also dispel any concerns or disagreements over money. Decide where you want to go and what you want to see. Many attractions, hotels and car rentals have their prices listed online.

Spending habits. Don’t assume that everyone’s finances are the same. Travel with those who think and value money the same way you do. If you are frugal and like to use coupons, you may have difficulty traveling with someone who likes to splurge. If you are with a group that values money, you may be open to more options that will save you money.

Split the bill. Add up the cost of the trip and divide it by the number of people traveling. That amount is then paid by each traveling member. You may want to consider opening a separate bank account that can be used to pay the cost of the trip. You can make direct deposits into the account. The account can be used to pay airfare, hotel stays, transportation and admissions to attractions.

Deadlines. Establish payment deadlines to take advantage of early planning. The closer to the peak summer travel dates, the more prices increase. Be aware of payment deadlines for airfare and lodging. Missing these dates could forfeit your reservation. Some reservations may not be refundable.

Eating. One cost that is sometimes overlooked, but can break a budget, is eating. Decide how many meals you will eat out or cook. If you use a rental property, most likely you will have a kitchen. You can also stay in hotels that have kitchenettes.

Cooking, even if it’s the simplest foods, will help you stick to a reasonable budget. Plan meals out in advance and discuss so everyone is happy with what is cooked. You may also research hotels that offer a meal for each night you stay.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 24 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.

 

Cut utilities costs during the summer

This was originally published on Monday, June 18, 2018, in the Pacific Daily News.  Click here to subscribe to the PDN. 

During the summer months, the temperature seems to be much warmer. With the kids home from school and utility bills on the rise, you may be in need of making some changes to help you save money on utilities.

Fans. This is a wonderful way to circulate air and keep the room cooler. Ceiling fans can cool the warm air that rises to the top of a room. They also use less energy than an air conditioner.

Window treatments. Blinds and curtains are an inexpensive way to keep direct sunlight from warming a room. If you are willing to pay a little more, look for curtains that block out sunlight and harmful UV rays, which also can discolor furniture.

Air conditioners. Keep your air conditioner to the highest temperature that you feel is comfortable. When you are not home, turn it off. You should clean your air conditioner filters at least once a month. Have a professional technician clean your unit at least once a year to certify it is running properly.

If you are in the market for a new unit, do your research on the unit’s SEER (seasonal energy efficiency ratio), which measures the ratio of cooling capacity to power input. The higher the rating, the more efficient it is. The SEER will vary by manufacturer and size. Ask your installation company for a rebate that you can use as credit toward your power bill.

Light bulbs. Traditional light bulbs create heat and burn more power. Look into replacing them with compact florescent or light-emitting diode bulbs. A 13-watt CLF or 9-watt LED bulb will burn 25 percent less energy than a 60-watt traditional bulb. Using natural light will reduce how much power you consume. Remember to turn off lights when you’re not in the room.

Turn it off. Devices such as computers, TVs and gaming consoles eat up power. They also generate heat. Remind kids to turn them off when not in use.

Laundry. Wash only full loads of clothing and at the coldest recommended temperature. Hang clothes to dry. Just before they completely dry, stick them in the dyer for five minutes if you don’t like that stiff feeling of clothes dried on the line.

Water. Turn off the water when brushing your teeth and washing dishes. If you have water running, and no one is using it, you may have a leak that needs to be fixed. Leaking pipes, faucets or toilets can waste a lot of water and will cause a high water bill. Install water-saving shower heads and low-flow faucet aerators.

Water heater. On-demand water heaters are a fantastic way to lower your power bill. You should invest in a water softener as well. The hard chemicals in the water could cause calcification, which will harm the on-demand heater. Use a timer for traditional heaters to turn on when you use it the mos and off when you aren’t home.

Yard. Water your yard only when needed. The best time is during the coolest part of the day, just as the sun rises and sets. Sprinklers use a lot of water. Set a timer to remind you to turn them off. Place sprinklers in an area that waters the grass and not the sidewalk or pavement. Use large buckets to capture rain water for watering plants. Add mulch around trees and plants to keep moisture from evaporating.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 24 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.

How your family can save money this summer

This was originally published on Monday, June 11, 2018, in the Pacific Daily News.  Click here to subscribe to the PDN. 

Summer is here. All the summer temptations come at a price. Summer doesn’t have to be expensive. In fact, with a little will power, the summer can be quite frugal. Here are some summer saving tips:

Summer cleaning. Now that the kids are out of school, have them clean out their rooms and look for outdated toys and clothes that no longer fit. Think about donating them to your local thrift store or have a yard sale and use the money earned to enjoy summer activities.

Thrift stores. Not only can you donate, but you can discover some awesome finds there as well. Are the kids in need of summer play clothes or a gently used book to read? Maybe you are looking for the perfect wall décor to spruce up your bedroom. You will be pleasantly surprised what you will find and at a price that doesn’t break the bank.

Carpool. Gas prices usually go up during the summer months. Consider sharing a ride with a co-worker or two, especially if you no longer have to take or pick up kids from school.

Summer sales. Stores are usually clearing out inventory to get ready for the upcoming holiday season. There also are holiday sales.

Buy in bulk. With the kids out of school there will be demands for snacks. Stay away from individually packages items. They may be more convenient, but they cost more.

Pack meals. Running errands and the kids are hungry? Think about pre-packing lunches and snacks. Stop by the local beach or park and enjoy a picnic.

Free activities. Keep watch of the newspapers, social media and listen to the radio for free activities. The beach, library, parks and hiking trails are fun ways to share family time away from home.

Leave the credit card. Enjoying summer activities can lead to extra spending. Leave your debit or credit cards at home and only use a predetermined amount of cash to fund your fun.

Oven/stove use. Oven and stoves can heat up your house. If your range is electric, it also will increase your power bill. Try using a slow cooker; they don’t use as much power as a range or give off much heat. Look online for recipes. Barbecuing is another way to keep the power bill down and the house cool.

Movies. Summer and blockbuster movies are synonymous. Movies have become quite expensive when you tally up the price of the tickets and the bill at the concession stand. Take in a matinee, which is usually cheaper, and eat before.

Movie nights. Why pay to watch a movie when you can watch one in the convenience of your home? Rent a video or watch on demand and enjoy homemade popcorn and hot dogs.

Staycation. Traveling off island can be quite expensive, especially if you have a large family. Stay at home and play tourist. Go for a picnic or go to the beach. It is far more relaxing than flying and navigating through an unfamiliar city.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 24 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.

Start planning for college

This was originally published on Monday, May 28, 2018, in the Pacific Daily News.  Click here to subscribe to the PDN. 

College is an exciting time for many. It’s important to start thinking about college as early as the high school freshman year. As you get ready to apply, start getting organized and be sure to be mindful of deadlines. Missing some of these deadlines can be costly or even cause you to postpone your start date.

It is important to prepare for the years to come and have a plan for how are you are going to complete your degree. Regardless what you plan to study and where you plan to attend school, you need to have a plan.

Junior year

This is the time where the choice of school has narrowed. Get on the colleges’ mailing lists for catalogs and other materials that can help you make your decision.

Taking your SAT or ACT is also a good idea. Numerous people take it several times to achieve a score they desire or just to shake off the nerves.

Start researching for scholarships or grants.

Senior year

This is the year where deadlines really come into play.

  • Fall. Meet with school guidance counselors to ensure you are on track to graduate and will meet college admission requirements. Also, ask them about college financial aid and learn about opportunities for scholarships and grants.

Start asking teachers, principals, coaches and other appropriate people for letters of recommendation. Start requesting for transcripts and begin applying to colleges and submitting applications for scholarships and grants.

Request for financial aid packages from colleges. If you are using a federal grant, your FAFSA, Free Application for Federal Student Aid form is available starting Jan. 1 of each year.

  • Spring. If you are going to need a private loan, start applying. Compare the financial aid offered from your chosen institutions. You may also want to check with your high school and chosen colleges if other scholarships or grants are available.

Payment options, clothing expenses

Decide on which college you want to attend and start discussing payment options. Many schools have a May 1 deadline to submit tuition deposits.

  • Summer before attending. Create a budget that includes expenses outside of your tuition and room and board. Include clothing, school supplies, transportation costs, and entertainment.

If you are living away from home, shop for room furnishings and décor. If you are going to a seasonal location you may need to consider clothing for the upcoming season.

You may want to get a summer job to help pay for expenses.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 24 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 options to pay for college

This was originally published on Monday, May 21, 2018, in the Pacific Daily News.  Click here to subscribe to the PDN. 

Many students enrolled in college are using some form of financial aid — from a relative or a scholarship or grant. Many different entities, including the federal government, local government, schools and private nonprofit organizations offer scholarships or grants.

Scholarships often are awarded based on one’s accomplishments, merit and need. Grants tend to be based on financial needs.

  • Pell Grant. Depending on financial needs and school costs, undergraduate students may receive up to $6,095 for the 2018-2019 award year. You don’t need to pay back the Pell Grant and it can only be used to earn your first bachelor’s degree. Part-time students can utilize the Pell Grant, but they receive less than full-time students.
  • Federal Supplemental Educational Opportunity Grant.This grant is given to undergraduates with exceptional financial needs, the award ranges from $100 to $4,000 per year. This campus-based aid is administered by a college’s financial aid office, but isn’t offered at all schools.
  • Teacher Education Assistance for College and Higher Education Grants. This program provides grants of up to $4,000 a year to students studying to become teachers. Recipients of this grant must agree to teach certain classes, such as math, science, special education, foreign language or bilingual education, at a school that serves low-income families for a designated period of time.

Educational savings accounts

Other ways of paying for college are educational savings accounts. They differ from regular interest-earning savings accounts because they usually aren’t taxed.

  • Coverdell Education Savings Accounts.Formerly called an education IRA, this account allows families to set aside $2,000 per child each year to be used tax-free for educational purposes.
  • 529 plans. These allow you to choose from a selection of investment options, including mutual funds, stocks or fund portfolios, and earn interest on these investments tax-free.
  • Brokerage accounts. Brokerage accounts allow you to purchase and sell investments, including stocks, bonds and mutual funds, through a brokerage firm. You can take money out for educational expenses, but you’re taxed on any investment profits.

Student loans to help meet financial gap

Sometimes scholarships, grants and savings may not cover your complete costs. Taking out a student loan may help meet the financial gap.

  • Federal student loans.These loans are backed by the federal government and offer a low, fixed interest rate. Federal loans provide protection for borrowers, such as the ability to postpone or reduce payments during periods of financial hardship. A Free Application for Federal Student Aid form must be completed.
  • The William D. Ford Federal Direct Loan Program. This loan is funded by U.S. Department of Education and is one of the largest federal student loan programs. Loans may be subsidized — the government pays the loan interest while you attend school — or unsubsidized, in which the loan interest is deferred while you’re enrolled in school and later added to your loan balance. There is a PLUS loan that is awarded to graduate and doctoral students, or parents of undergraduates, to pay for college costs not covered by other financial aid.
  • Federal Perkins Loan Program.Not all schools participate in this loan because the school is the lender. Your payments are made to your school or their loan servicer.
  • Private student loans. These are offered through banks, credit unions, financial institutions, state agencies or schools. They’re a good way to pay for educational expenses not covered by other means. The interest rates depend on the borrower’s credit score and usually come with a higher interest rate.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 24 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.

 

Consider upfront costs of a higher education

This was originally published on Monday, May 14, 2018, in the Pacific Daily News.  Click here to subscribe to the PDN. 

Higher education is a goal for many, whether they are graduating from high school or have been working for some time and want to position themselves for a promotion.

Education isn’t cheap. Over the years, the cost of education has steadily increased. Even before you start classes there are several upfront costs you should consider.

Fees for getting into college

Testing. Many colleges require SAT or ACT test scores. It costs money to take both tests. For both tests, you are able to send your score to four colleges. If you send them to more than four, you will incur the cost for each additional institution.

Transcripts. Whether it is high school transcripts or college courses you previously took, you will need to send them to the institution to which you are applying. The cost to send them varies, but each school you are applying to will need an official copy. Some schools will accept an email version of your transcripts if they come from a third party, which means more fees.

Application fees. The average application fee is about $42, according to a study by U.S. News & World Report. This fee is used to process your application.

Deposits. Once you are accepted and decide which school to attend, you may incur some fees. A tuition deposit may be needed to confirm your enrollment. If you are going to be living on campus, you may be asked for a housing deposit to reserve a dorm room or other quarters. If you are living off campus and renting a dwelling, you may have to pay a security deposit and sometimes the first and last month’s rent.

Once you’re in college

Books. College books aren’t cheap. Some books can cost more than $100 and some classes may require more than one book. Consider purchasing pre-used books, renting or downloading an e-version. You can also sell your books once you are done to help pay for the next semester’s book costs.

Tuition and fees. Tuition can be the largest expense you may have to consider. Costs vary depending if you are an in-state or out of state student. Your area of study can also determine how much your tuition costs. Some additional fees are parking, library, computer, dining hall, medical insurance and other campus services. Many institutions have monthly payment plans for your tuition.

Other costs. There are other costs you may have to consider, including  a computer, the cost to furnish your room and food.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 24 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.