Tips for spending during the holidays

This was originally published on Monday, October 5, 2015, in the Pacific Daily News.  Click here to subscribe to the PDN.

It is hard to believe that the year is coming to an end and that the holidays are quickly approaching. As much as we try to enjoy the holiday season we often find ourselves financially stressed. As we all know, overspending during the holiday season is quite common and quite easy to do. Companies and stores spend a lot of money trying to tempt you to spend your money with them. Here are a few tips that could keep you in the green instead of seeing red:

Create a spending limit

Take into account everything that you will be paying for this holiday season. There is much more to include than just the gifts. Think about the other things that can sneak up on you, leaving you to ask the question, “Where did all our money go?” Remember to add in the holiday parties, shipping fees for gifts being sent off-island, ATM fees, more power consumed while kids are home on vacation, and of course, the increase in your food budget. If possible, add another $200 to cover the incidentals like an unplanned gift or party that you have been invited to.

Make a list of who you are buying gifts for and how much you are willing to spend. Create another list with the parties you are invited to and what you plan on bringing and how much it will cost you. Keep a journal of how much you are spending; it is easier to know how much you spend when you actually start watching it add up.

Pay with cash

This is probably the easiest way to stay on your holiday budget: Once it runs, it runs out. Be careful with using a credit card for these expenses. Credit cards make it easier to keep spending without realizing just how much you have spent until the bill comes in. You could ask the bank for all $100 bills. It would make you think twice before breaking a large bill. Of course, be alert, because many thieves plan on you carrying cash. It is also easier to lose and once it is lost you can’t get it back.

If carrying money makes you uncomfortable, use your debit card instead. There are no interest fees and your bank may have an app for your phone to monitor your purchases.

If you are going to use a credit card, know which one is the best to use. Many people have more than one or two credit cards in their wallets. Choose the card with the lower interest rate and balance.

Avoid extra fees that you incur by exceeding your spending limit or using your credit card at an ATM. Pay your balance in full and within the billing cycle to avoid late charges.

Buy least expensive first

If you are looking to buy electronics or other high-priced items, try waiting till the stores put them on sale. Black Friday and Cyber Mondays always offer some great deals.

For those gifts that are least expensive, like gift cards or books, purchase those a month or two in advance and it will not add to your December spending.

Be creative

With today’s access to gift-giving ideas online, there are no shortages of gift ideas. There are many alternatives to expensive gifts. Many of them mean more as they come from the heart and not the wallet. There are photo albums, homemade art work or decor, and so much more to create. Some use store-bought materials but many reuse items that you may have laying around your house. Gift baskets are always a hit as well. Put an entertainment basket together with some microwave popcorn, DVD’s, and movie gift certificates. Use your talents like sewing, carpentry and scrapbooking to make a gift that won’t be forgotten.

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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End of the year a good time for a financial checkup

This was originally published on Monday, December 01, 2014, in the Pacific Daily News. Click here to subscribe to the PDN.

It is hard to believe that 2015 is just a month away. The holiday celebrations are in full swing and we are focused on being with family and friends. Many of us are not thinking about our finances, except maybe for those extra holiday expenses. Nonetheless, the end of the year is a great time to give yourself a financial checkup. Performing an end-of-the-year financial review will help you set new goals for the upcoming New Year.

• A lot can happen in a year and if you have experienced a major life change you will certainly need to review and update your financial records. Here are a few things to consider: Did you have a change of job status? Buy, sell or refinance a home? Are you newly married or divorced? Did you move? Did you welcome a new arrival to your family? Did you lose a loved one? Did you or a family member become seriously ill? Did you receive an inheritance or gain extra income such as child support or alimony?

• Your budget: This is one of the easier aspects to review because you use it on a daily basis. Budgets are very flexible depending on your life circumstances. Your budget should be reviewed when major life changes happen, such as a promotion or loss of a job, marriage or divorce, the birth of a baby or retirement. When reviewing your budget, ask these questions: Does your budget reflect your financial situation? Is it helping you meet your financial goals? Have you incurred more debt or paid some off? Has your income increased or decreased? Have your expenses increased or decreased? Are you constantly over budget? Did you have many unforeseen expenses? Have your financial goals changed? By answering these questions, it will be easier to assess and plan out next year’s goals.

• Net worth: Determining your net worth yearly can give you a snap shot of your financial situation. To determine your net worth, you first add up all your assets. Assets would be your home, cash, car, stocks, retirement funds, businesses and other personal property; basically anything you own that has value. Then subtract your liabilities (debt) from your total assets. Debts such as a mortgage, credit cards, loans and other outstanding debt. The total is your net worth. If your assets exceed your liabilities you have a positive net worth. If your liabilities are greater than your assets, you have a negative net worth. Obviously, you want a positive net worth and reviewing your net worth yearly will give you an idea if you need ne three credit reporting agencies. It is up to you if you want a report from all three at once or spread it out over a year. You can request your credit report from AnnualCreditReport.com or by calling 1-877-322-8228. There are many sites that claim to give you a free credit report, but AnnualCreditReport.com is the only one authorized by law. Look at your report for any unauthorized accounts or discrepancies on your payments or credit history. If you find any errors on your report, write the credit reporting company and they will request more information from the agency that is reporting the error. Your credit report will also help you gauge your finances.

• Powers of attorney: Usually powers of attorney have a year to five years before they expire. Check the expiration dates and get them renewed if necessary. If you no longer feel comfortable placing your trust in someone you have named on the power of attorney, terminate it and place someone else that you do trust.

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.

Survive Black Friday with your budget intact

This was originally published on Monday, November 17, 2014, in the Pacific Daily News. Click here to subscribe to the PDN.

You probably noticed the buzz of the holiday season is quickening. The stores started to deck the halls and the Christmas wish lists are starting to grow. The day after Thanksgiving is the largest and busiest shopping day of the year — Black Friday.

Black Friday is not for everyone; some people would rather stay at home and sleep in after their Thanksgiving feast. But if you don’t mind the early start, the crowds, the long lines and the great deals, then get ready to shop. Here are a few tips to help you prepare you for Black Friday:

• Create a list/budget: Decide who is on your nice or naughty list and how much you can afford. Set a limit and create a realistic holiday budget. Prioritize your expenses and decide how much you want to spend on each. Make a list of those you are buying gifts for, include how much you want to spend and what you want to give them.

The hardest part is sticking to your list and budget. Stay within the budget you set and say no to items that will cause you to go off budget.

• Compare: You know how much you want to spend so the next step is to compare prices between stores. Look through the newspapers, sales fliers and online shopping sites. Some stores will guarantee the lowest prices and may match the price of the item if you bring in the competitor’s sales ad. This may take some researching and time but it will save you money, time and gas if you make one less trip or stop.

• Understand the sales times: Some stores may have Black Friday hours of opening early and closing late. But sometimes the sale prices don’t go in effect until a certain time. Read the advertisement carefully.

• Decide how you will pay: Cash is always welcomed at stores. It is easier to keep track of how much you spend but it can be dangerous carrying around large amounts of cash.

If you are going to use a credit card, use only what you can pay for that month. By paying it off as soon as you get the statement you will avoid interest charges. Some credit cards have a cash back policy if you purchase certain items. Stores may offer extra savings if you open or use their store credit card. These discounts are great offers but treat them as you would other credit cards and charge only what you can pay off. The interest rates on store credit cards can be extremely high.

• Bring along a friend: Not only is it more fun but you can also take advantage of certain sales, such as buy one get one half off. You can also help each other by dividing and conquering each other’s lists. It is always helpful for a friend to hold a spot in line for you while you run off to look for an item. Of course your friend can be a voice of reason when you are tempted to go off budget.

• Be aware of extra costs: There are always little costs that sneak up on you and most of the time we do not realize how much it throws us off budget. Some stores offer warranties especially on electronic items. Check if your credit cards have extended warranties on certain items if you purchase them with the card.

You are going to be out and about for an expanded amount of time and you will get hungry. Instead of buying a snack here and there, bring snacks with you. Stores may offer a discount on items if you purchase two or more. If you do not need two, you will not be saving money unless the second item is free.

• Keep the receipts: You may need to return an item and the only way to do so is if you have the receipt. Receipts will help you review your budget’s status and to compare charges on your credit/debit card. You may want to ask for a gift receipt for the person you are gifting. It will make it much easier for them to make exchanges or returns.

Remember to keep calm, wear comfortable clothing, and that if you aren’t one to be out in loud, stressful crowds, there is always Cyber Monday.

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.

Paying down your holiday debt in the new year

This was originally published on Monday,January 06, 2014, in the Pacific Daily News.  Click here to subscribe to the PDN.

Question: I spent a little too much last year during the holidays and created a good amount of debt on my credit cards. Do you have any advice on how to get out of my holiday debt situation?

Answer: Many of us, even after making a budget, get caught up in the spirit of giving and go overboard. It is good that you realized that you have overspent and want to get free of your holiday debt. The interest and fees add up and increase your total amount of debt.

Here are a few tips that can help:

• If you used multiple credit cards to purchase holiday gifts, pay the card with the highest annual percentage rate (APR). That does not mean missing payments on the other cards. Pay at least the minimum amount on those cards and put more into the account with highest APR. Once you finish paying off the debt with the highest interest, roll that payment into the next highest-interest-rate card.

• Get a consolidation loan to pay off the holiday debt, but don’t exceed a 12-month payment term. That way you know you’ve paid off last year’s debt before the next holiday season.

• During the holidays, many stores offer interest-free or no money down, in-store credit card deals. Know what your terms are and when your payment date starts. Interest on these cards can be just as high as traditional cards, if not higher.

• Turn unwanted gifts into cash. I know this may sound a bit tacky, but it is better than having an unwanted gift sitting around collecting dust. Typically, kids get a bunch of gifts and forget about or outgrow past gifts. If that is the case, have a yard sell and the money collected should go straight to paying off your holiday debts. You also can use auction sites to help sell your items.

• If you received a holiday bonus or end-of-the-year pay increase, use that money to help pay off your debt. If you file for your taxes early and receive a refund, you also can use that money to help pay your holiday debt.

• Find ways to help bring in extra income. Turn a hobby into a side business or get a part-time or weekend job. The extra income will help reduce your debt very quickly.

• Call your bank and see if they are willing to negotiate a lower interest rate.

• Look into transferring your debt to a new credit card that has a lower rate. These cards a called balance transfer cards. These cards have a 0- to 5-percent interest rate for a short period of time.

While you are paying off your holiday debt, it is important not to use your credit cards. Paying off your debt will relieve some of the financial stress and anxiety and free up your money for other investments.

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.

Early planning can help you keep a holiday budget

This was originally published on Monday, August 19, 2013, in the Pacific Daily News.  Click here to subscribe to the PDN.

‘Tis the season to be jolly?

Believe it or not, the year is more than halfway through and the holidays are just a few months away. What better time to talk about saving and budgeting for the holidays.

Have you noticed that summer brings some great deals? Memorial Day, Christmas in July and Labor Day sales are ways that stores purge most of their older stock to make room for their upcoming new items. So what does that mean to you? Great savings! Start thinking about who is on your list.

• Shop early. Give yourself time to compare prices; don’t wait till 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.

• Don’t be tempted. Have you ever walked into a store around the holidays with your list in hand saying, “This year it is going to be different; I’m staying on budget no matter what.” But then you get seduced by the fancy décor and jolly music, plus the added pressure that the holidays are only so many days away. Soon, that list does not seem so significant. Don’t get tempted. One of the best things about shopping off-season is that the seduction and pressure is not a factor. Think twice before you buy.

• Have a spending plan. Create your “nice” list by separating the list into three parts. The first part is the top tier. The people in this tier are your parents, siblings, spouse or kids. Those in this tier are the ones you plan on spending more on.

Beside their names, put a dollar amount as to how much you want to spend on them. The second tier is your close friends, your kid’s best friends, and so forth. The people in these tiers are the ones you plan on spending for a gift, but not as much as those in your top tier. Put a dollar amount beside their names. In the last tier are those that are not as close to you like co-workers, the mailman or your kid’s bus driver.

Think about giving those in the last tier 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. Actually, you don’t have to “BUY” gifts for everyone. Be creative! The best gifts are those that are thoughtful and not necessarily bought.

• Keep your shopping list with you. Carry it in your purse, wallet or even smartphone. 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.

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 atwww.moneymattersguam.wordpress.com

Steps to paying down holiday debt

February 21, 2011

Steps to paying down holiday debt

Editor’s note: Today is the launch of “Money Matters,” a new weekly personal finance column by local financial expert Michael Camacho.

The tree is down. The lights, ornaments, and decorations have long since been packed into boxes and placed in the closet. The kids (and maybe even you) are playing with the new toys and presents.  Vacation is over and the kids are back in school. All that is left of Christmas are memories of family and friends — and holiday debt.

Holiday debt can sneak up on even the most aware and cautious of holiday spenders. The Christmas season is over, but here come the bills. The bottom line number might be a little surprising to you: “Did I really spend that much?” Don’t let it get you down. Here are a few simple steps to take control of your holiday debt.

Get some extra cash

  • Were your eyes bigger than your wallet? You could possibly have a few items that weren’t given during the holidays and you might still have the receipt. If possible, take it back to the store and get a credit on your credit card. If the purchase was made with cash or check, use the refund to pay down the credit card debt.

Stop your spending

Are the bills coming in the mail creating a pain in your stomach? Don’t use your credit card to keep buying if you’re prone to use impulse buying to make you feel better. Put your credit cards away now!  Charging more will only lengthen the time it takes to pay off your debt. Every dollar you charge will add more time to pay off the past Christmas debt. The short term pleasure of the impulse buy isn’t worth it.

Be honest with yourself 

  • It’s time to be honest with yourself. Avoiding and pretending the holiday debt doesn’t exist will only make things worse. It is cliche but true: honesty (with yourself) really is the best policy. Each month you put off making a payment or not paying at all, you will be charged a late fee. Late payments will be reported to the credit bureaus and will affect your ability to borrow in the future.

Create a pattern for success

  • Success breeds success. After you have been honest about what you owe, write down your balance and each time you make a payment subtract from the total. Seeing your monthly progress will encourage you to keep at it as your holiday debt disappears. Nothing will make you feel better than watching that balance get to zero.

Pay down one card; then go to the next card

  • Can’t figure out which credit card or holiday debt accounts to pay first? If you have many cards or accounts to pay, consider choosing one account and make larger payments to that one while making minimum payments to the others. When that card is paid, choose another to begin the larger payments and so on to each of the accounts.

Pay as much as you can 

  • Always try to pay more than the minimum due. Any extra money toward your debt is always a good thing to do. You’ll pay off the balance faster and you’ll pay less in interest. Doing this might strain your monthly budget a little bit, but over the long run, you’ll be glad that you made the commitment to tackle the debt head on and to straighten out your household finances.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 18 years experience in retail banking and with financial institutions in Guam and Hawaii.