Tips to save money in the summer

This was originally published on Monday, May 27, 2019, in the Pacific Daily News.  Click here to subscribe to the PDN.

By making some small changes to your household and lifestyle, you can ease the burden on your wallet without sacrificing the summer fun.

  • Rent heavy duty tools.Summer is a popular time for home improvement and borrowing or renting heavy equipment instead of buying can save you a lot of money. Depending on the scale of the project, you could save thousands of dollars.
  • Keep blinds, curtains closed. Close the blinds on western-facing windows to limit the sunlight entering your home and reduce your air conditioner’s workload. Following this simple tip can decrease the amount of sun-generated heat in your home by up to 77 percent, according to the U.S. Department of Energy.
  • Fill in air gaps.Don’t let precious cool air escape because your home isn’t airtight. By insulating properly and sealing gaps, you can keep cold air inside and reduce the strain on your air conditioner. It’s a fairly cheap fix that can produce significant savings.
  • Keep vents clean and clear. Your air ducts should be cleaned out at least once a year to prevent dust and dirt buildup from reducing airflow. You should also be careful not to block any vents with furniture or decorations.
  • Replace AC filters.Along with keeping your air ducts clean, you should replace or clean your air conditioning filter regularly to prevent it from getting clogged. Swapping a dirty filter for a clean one can reduce your unit’s energy consumption by between 5 percent and 15 percent, according to energy.gov.
  • Moderate AC temperature.It might be tempting to lower that thermostat to 70 degrees on brutal summer days, but you’ll end up paying a hefty price for the convenience. Save 1% to 3 % on your electric bill for each degree the thermostat is set above 72 degrees, according to the California Science Center.
  • Use fans.Turning the air conditioning off and switching on a fan can be an excellent money saver. Fans use less power and keep the air in your house circulating, which makes you feel cooler. Reduce cooling costs by as much as 90% per day by using fans instead of the air conditioner, according to Energy Impact Illinois.
  • Take a cool shower.Taking short, cool showers helps regulate your body’s temperature. You won’t need to run the air conditioner as much, resulting in a lower energy bill.
  • Cook outside.Summer cookouts aren’t just great fun, they’re also great money savers. By taking the kitchen outside, you prevent heat from the stove or oven from building up and eliminate the cost of running those appliances.
  • Turn off lights.It’s a bad habit to leave the lights on when you leave a room. Switching them off can save you a bundle in the long run. Old-fashioned incandescent bulbs give off 90% of their energy as heat, so you might want to switch to a more efficient lighting source.

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.

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Finances critical for college students

This was originally published on Monday, April 22, 2019, in the Pacific Daily News.  Click here to subscribe to the PDN.

College students face many difficult financial decisions when it comes to managing their money. Often, they 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 spending can impact their job search, their credit score and their ability to pay back what they borrowed. As young adults they need to figure out how to pay for college, earn some spending money and still go to class and get good grades.

  • College is the best time to start thinking about being financially sound and getting into the habit of creating and using a budget. A student’s financial responsibilities are still simple and manageable. It will not take long to create a budget.

It’s easy to lose track of spending and having a budget ensures that they will know exactly where their money is going. Today’s technology makes it easier with apps that they can use directly from their smartphone.

  • Credit card debt.Credit cards are a convenient way to pay for college necessities and can play an important role in establishing a college student’s credit history. Schools sometimes allow financial institutions to come on campus during open house or orientation. The financial institutions usually offer credit cards for college students.

Because students may not have favorable credit yet or do not have income, these credit cards have high interest rates, unfavorable terms and allow students to spend more money than they earn. At times, the financial institution may require parents to be a co-signer.

If the student only pays the minimum monthly payment, they may be stuck paying their credit card debt years after they graduate. In worse scenarios it could affect their credit score and that of their parents, if they are co-signers.

Teach college students how to use credit cards wisely, paying the bill on time and only charging what they can afford to pay in full. Inform them of the consequences if they pay late or do not pay off their debt in full.

  • Peer pressure.Living on their own without parental supervision leaves students open for all sorts of 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.
  • Failing classes.For many years your child has attended school and followed a strict schedule. Even their after-school activities and homework are carefully monitored. College is very different from what they have been accustomed.

Some professors may not 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.

Dropping classes may result in forfeiture of the tuition and retaking classes 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.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 25 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.

College students need a budget

This was originally published on Monday, April 15, 2019, in the Pacific Daily News.  Click here to subscribe to the PDN.

College or career school costs can vary significantly and there are many schools with affordable tuition and generous financial assistance. Make sure to research all schools that may meet your academic and financial needs.

Set a budget and stick to it. Determining a budget will help you compare anticipated college or career school expenses against your potential available income and financial aid. You also can use a budget to compare costs between different schools.

  • Tuition and fees:Tuition is the cost of the classes and can vary depending on the school you attend and the number of classes (or credits) you plan to take each semester. The major you are perusing can also influence the price of tuition.

For example, resources and supplies used in engineering or computing may be more expensive than the needs of business majors.

Tuition fees may include student parking, library access, lab fees and other campus services.

You may be required to put a down payment to enroll you in your classes. Most colleges will offer a payment plan.

Tuition costs will also be higher if you are an out-of-state student.

  • Living expenses: Besides the costs of books, tuition, room and board, you will incur other incidental costs. You should enjoy your college experience, attend games, enjoy a night out on the town and take in the local attractions. Balance studies with fun.

Create a budget to help you stay on track. Whether you are living in the dorms or renting an apartment, you will have to purchase necessary items to furnish your new living quarters. Many rentals around the campus have fully furnished apartments to rent.

Other costs may include a computer, printer, microwave, small fridge, bedding and towels. You may also need other equipment for certain classes.

Don’t forget to add mobile phone and seasonal clothing.

To offset some of your living costs, you may want to get a part-time job. Many local restaurants around the campus hire college students. You can also find part-time employment on campus.

  • Health care: Most young adults can stay on their parents’ family health plan until they turn 26, even if they are married or not living with their parents. Some schools offer a student health plan which can be an affordable way to get basic insurance coverage.

According to the healthcare.gov web site, a student health plan will count as qualifying health coverage. This means you are considered covered under the health care law and won’t have to pay the penalty for not having insurance. Be sure to check with the plan to be sure.

If you are under your parents’ family plan, be sure to find what local hospitals and clinics will accept your insurance and how much will be your co-pay.

  • Travel:You may want to include a yearly flight back home. If mass transportation isn’t available, you may also want to think about how you will get around. If you purchase a car, remember to add insurance, fuel and maintenance to your budget.

If you live off campus and public transportation is available, you will want to add that into your budget as well.

Bicycles are a great mode of transportation while in college. The added benefits using a bicycle is you get a little exercise, you can lock your bicycle near your classroom and you avoid parking fees.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 25 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.

Getting married? How to discuss money, finances before the wedding

This was originally published on Monday, February 25, 2019, in the Pacific Daily News.  Click here to subscribe to the PDN. 

When two hearts become one wallet, it’s critical that you understand each other’s values on money. Before walking down the aisle, you and your soon-to-be should have the money talk.

The talk isn’t always an easy conversation to have. However, these talks should be a priority, since poor money communication can lead to unhappiness in a marriage. Merging your finances and your lives may be challenging without a firm foundation. As difficult as the talks may be, each partner needs to bring honesty and realistic goals to the conversation.

Budget. You and your partner need to decide how you want to budget. Include your take-home pay, how much debt you have, how much you have saved, and what you spend monthly. Discuss what each other’s plans are to pay off debt. Discuss your financial goals: whether it be buying a house, going on a vacation, having children, going back to school or when to retire.

Once you create a budget, decide how often you want to go over your expenses. You can also discuss how you are achieving your goals. Talking about money early in the relationship makes it easier as more responsibilities are added to the family budget.

Mine, yours and ours. When entering a relationship, you have three main options for dealing with money:

  • each spouse manages and maintains their own separate accounts and each pays an agreed upon amount per month of household expenses;
  • merging your accounts halfway where each spouse keeps a separate bank account in which their paychecks are deposited. Then there is a joint account that each spouse contributes to which is used for household expenses; or
  • joint checking account in which all paychecks are deposited and from which all expenses are paid from.

Not every couple is the same. What works for your parents may not work for you. It’s important that each person is comfortable with the option that is decided. If after a while it doesn’t work, you can always try a different option.

Prenup. Prenups used to be taboo, but many couples are now deciding to protect their assets before entering a marriage. People are getting married later in life when they have careers, a house and have started contributing to their retirement accounts.

Most lawyers recommend one for both parties, especially if each party is bringing with them a large amount of assets and debt. It is best to use different lawyers to represent each party.

Will. It could be considered an odd time to think about death at a time when you are planning for one of your happiest days. But a will is a vital financial and legal document that each spouse should have.

Create a list of your assets and financial accounts and how you would like them to be divided. If you have children, include who will have custody if the worse should happen. Include in your will who will have custody if something happens to the both of you. The attorney drafting your will may cover all these areas and more.

Insurance. Coming into the marriage, you probably have different insurance companies. As you merge car, home and life insurances, you may want to shop around for different policies and see if they can be bundled to save money. Ask your employer about a two-party or family health insurance policy and how much of a difference it will cost.

If you don’t have life insurance, you may want to consider getting a policy that protects both spouses. It’s best not to wait until you get older since premiums increase.

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.

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.

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.

 

Get your personal finances into shape

This was originally published on Monday, January 1, 2018, in the Pacific Daily News.  Click here to subscribe to the PDN.

Happy New Year’s! Many of us are looking at the first day of 2018 as a fresh start. The No. 1 New Year’s resolution is usually to get physically healthier by losing weight, eating better or to start exercising. As you start to get healthier, don’t forget to get your personal finances in shape as well.

Here are a few ideas to get your wallet and budget healthier:

Get out of debt. Most people think debt is all the same, but it isn’t. Make a list of all your debt and liabilities, including the amount and interest rates. The debt with the highest rate should be paid off first. Once you pay that debt in full, use the same amount to pay toward the second-highest debt.

Think about your retirement. If you haven’t opened a retirement fund, you may want to strongly consider one. If you have one, add a little more to your contributions. If your employer matches your contribution, contribute at least to their maximum match. Take some time and talk to your financial adviser if a traditional IRA or Roth would best suit your financial goals.

Save money. One of the hardest yet most important financial steps to take is saving money. You should have at least three months worth of your living expenses saved in case of an emergency. This includes rent/mortgage, groceries, utilities and loan payments. If you are looking to buying a home or car this year, open an account that is strictly for that goal. One of the easiest ways of savings is using an automated deposit into your account.

Spend less. Take a good look at your spending habits and examine where you can cut back. Find ways ] you can spend less money. Cancel your gym membership and work out at the beach or at home. Look at bundle plans for your insurance and communication needs.

Cutting cable is a big trend in saving money. Many have opted to remove cable from their homes and use online entertainment apps and sites.

Another money saving technique is to commit to a weekly no-spend day. Set aside one day a week where you spend absolutely nothing. No shopping, pack lunch to work and school, use free entertainment. If you spend an average of $20 a day, by the end of the year you will have saved $1,040.

Another money saving idea is to learn how to perform your car and home maintenances. There are many online sites to help you fix and maintain your property.

Make more money. Do you have a hobby like painting, sewing or baking? Or maybe a skill like automotive maintenance or babysitting? Turn these hobbies and skills into making money. Why not get paid for doing something you love and are good at? Consider a part-time job. Even if it isn’t a high-paying job, every little bit counts and adds up.

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.