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.

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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.

Summer jobs teach teens to manage money

This was originally published on Monday, May 30, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Summer is just around the corner. You may have a teen eager to try out the work force. Summer jobs teach teens how to manage money and what is expected of them once they are ready to start a career.

There are many advantages to working a summer job. Help them understand that there is temptation to buy the latest gadget, game or clothes and that treating yourself every now and then is OK.

But give them the true gift of understanding the value of money.

  • Savings account. Find a good starter account, one that does not have many penalties, especially for maintaining a balance below a certain minimum. Many banks offer bank accounts for kids of all ages. Usually credit unions charge a lower fee and pay more interest.
  • Basic money management skills. Technology has made it easier to keep up with your budget. There are apps that kids can download right onto their smartphones.
  • Investing. Get kids interested in different ways to invest their hard-earned money. There are stock market games that kids can play, using real-time information on what is happening in the stock market. Kids invest game money and use it to compete with each other.  Once they see the potential of investing their money, and potentially making money, they may be interested in actually investing some of their summer earnings.
  • Retirement. Many kids still in high school haven’t even thought about retirement. This is a great time to teach the concept of compound interest and how it can work for you. Starting a retirement fund at 16 verses 35 can create a nice nest egg with the possibility of early retirement. Besides the lure of a larger retirement fund and early retirement, there are other benefits to a teen Roth account. If money is used to purchase a first home, the money can be withdrawn free of taxes and penalties. Also, the Roth account cannot be used as income when applying for financial aid for college.
  • College. If your child is considering college, it doesn’t hurt to have them pay for a portion of it. After all, if they understand how much hard work went into paying for college, they might understand how much time and energy you have put into covering the rest. Cost of tuition, books, fees, living quarters and just the basic college necessities keep rising every year.
  • Down payment. Once a child gets their driver’s license, they want a vehicle to go with it. As much as we would all love to wave our wand and see a car magically appear in the driveway, we know that paying for another vehicle could cause us to go over budget. By working summers, they can save up for a down payment, pay for fuel and even help with the insurance.

Besides the financial aspects, summer jobs help foster confidence, time management, opportunity to learn more about themselves, networking and experience — and may even open up a door to a career they never thought about.

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

Tips for the family vacation

This was originally published on Monday, May 1, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Question: My family and I have talked about going on a dream summer vacation off island a few years from now before my oldest graduates from high school. Do you have any tips to help me give my family the vacation of a lifetime?

Family vacations, whether on island or off island, are lots of fun and create many wonderful family memories. These family memories will be shared for a lifetime, but you don’t want the trip to put you and the family in a financial bind.

Going off island can be very costly. Just the plane tickets alone are expensive. Of course, with anything that expensive, you need to save. Making the family dream vacation come true is a great feeling, but you certainly want to plan and budget well in advance. Here are a few things to consider when putting your family vacation budget together.

  • Be flexible. Do you know exactly where you want to go? If not, keep your options open. Do some research with your family. You may want to consider traveling internationally, especially if the dollar is strong. Look for destinations that provide you the most for your money. The typical tourist destinations are usually pricier.

The best time to travel is May through early June. Although the kids are still in school, it can save you money. Talk to your child’s school and see if they can arrange a way to let your child out a little earlier. By traveling during the off-peak times, you can save a lot of money. Airfare, rental cars, and hotels have some of their best deals outside the peak summer travel months. Weekday travel is usually cheaper than traveling on a weekend. Also avoid traveling on three-day weekends.

  • Non-summer travel. Does your vacation have to be during the summer time? Think about spring, Thanksgiving or winter break. Most schools are willing to work with you to extend these breaks a few more days so that you can travel. Schoolwork is a great way to keep kids busy on an airplane.

Use your points or rewards. Many companies now give incentives to use their services. Many airlines, gas stations, car rentals, hotels and credit card companies can save you money by using their customer loyalty programs. Some programs may even partner up with other companies to offer package discounts.

  • Shop around. Travel agents can help you create the dream vacation and are convenient. But they do charge extra for their time. Get quotes from several different agencies before committing. You may also want to consider an online booking agency. Many of them can create package deals with airfare, hotel, rental car and amusement parks. Since they have direct contracts with these companies, they can be less expensive to book.

Whether you use a traditional travel agent or online booking, be sure that you know what you are buying. Spend a little extra money for a refundable option. You may run into some difficulties during travel or even before you start. The last thing you want is to pay for that dream vacation that you never took.

  • Book in advance. Whether it is airfare, hotels or rental cars, booking in advance usually saves you money. Some travel websites recommend anywhere from 45 to 90 days in advance. Check fares early and often. You can sign up for airfare alerts through certain programs online. Once again, be flexible. Usually the most direct route is the most expensive. If you have time, consider alternate routes or flying one route to your vacation and flying back on another. You may have more stops and layovers, but as the saying goes, “It’s not about the destination, but the journey.”

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

Give your kids basic financial tools

This was originally published on Monday, February 20, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Finances are difficult for some adults. Many have learned the hard way that messing up their finances can create a dire situation. Giving kids the financial tools they need prior to heading out on their own is an important role of a parent.

You can help them discover the difference between earning, spending and saving. Children will also learn the value of money. Introducing them to finances at an early age gives them a head start to a healthy financial future.

No matter what age, here are a few important lessons to teach your children about personal finances:

  • Money does not grow on trees. There’s not an endless supply. There are limits to how much money you have. Many kids see adults swipe a card and see money comes out of and ATM. Instill in them that whether it is a credit card or debit card, it is tied to real money, even though they do not see it. By setting up a savings account, they see for themselves first-hand how the concept works.
  • Money is earned. Whether it is a plastic card or money in hand, many kids don’t understand the effort it takes to make money. Of course they see mom and dad heading off to work. But do they know how hard you work? By giving kids the opportunity to earn their own money, they can get a better appreciation for you and learn the value of money. This teaches a work ethic and makes them more invested in the choices they make.
  • If you want it, save for it. Video games and other electronics that most kids fancy these days can cost a lot. Giving into every request for a toy doesn’t teach kids how real life works. Teach them the idea of saving their money for things they want. If it is worth having, it is worth saving money. This is a very valuable lesson about how we get the things we want in life.
  • Making choices. Spending for something now means not being able to afford something later. Help them think about their goals and aid them in making the right choices. Most adults face severe consequences when they make the wrong financial choices. You can help them learn this lesson early in life, at a time when making the wrong spending decisions does not affect them as much.
  • Credit and investing. Irresponsible credit usage is a cycle that is hard to break. Many use credit to pay off other credit and around and around it goes. As kids get older, you can teach them about renting a house versus owning a house. Teach them about investing in the stock market. Talk about compound interest and how it applies to credit and investing.
  • Rainy day savings. Start them from a young age with the idea that putting money away for an emergency is a necessity. If they learn this habit as a child, they will most likely continue it as an adult. Having an emergency fund will reduce the likelihood of taking on more debt.
  • A good lesson every child should learn is giving. Giving a little money to a worthy cause can go a long way. It builds self-esteem and self-worth. Understanding that they are part of something bigger and looking outward will help them become productive citizens.

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

Teach your teens about finances

This was originally published on Monday, February 20, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Giving your children a good foundation and teaching them about financial matters is critical for their personal development. Knowing how to budget, spend and save will establish good money habits for life.

If children develop good financial skills, they will be ready for the financial challenges that adulthood brings. Teaching children the value of money, especially through real life scenarios, will help them understand where money comes from, how it is earned and how to save it. As kids become older, real life situations and examples are the best way to learn.

Ages 13 to 18

This age group has started thinking about college and what they want to be when they grow up. At his age they can start thinking about long term financial goals. It is a good time to learn about the stock market, budgeting, and being responsible for their spending.

  • Compound interest. Simple math can teach how compound interest can be used to make money grow. Show them the effects of different interest rates on the same amount of money. Show them how compound interest can work against them when using credit cards.
  • Long-term goals. It’s always good to think about the future. Kids at this age have many wants and are tempted to spend as soon as they get money. Help them see that delaying what they can buy today can make a huge difference in what they want later. Using what they have in their savings account, let them calculate how long it will take to save and pay for it.
  • If not sooner, when your child reaches the ninth grade, sit down with your child and discuss the cost of college. Being honest about how much you can afford will help them set realistic goals when they start looking at colleges. Help them see there are other ways of funding college. Start looking into scholarships and grants.
  • Credit danger. Children often don’t see money exchanged for purchases in this world of invisible money. Invisible money is used when people use credit cards, internet banking and online shopping. It sets a false sense that money is limitless. As soon as your child turns 18, he or she will be inundated with credit offers. If they don’t understand the dangers of credit, some may fall into the credit cycle many get trapped in.
  • Help them start their first budget — how much they make versus how much they spend and save. Include money needed for gas, lunch and entertainment. Create a checking account for them. This will help take money managing a step further. If they fall short, don’t bail them out. They need to understand the consequences of their decisions and actions.
  • One thing many teenagers have is free time. Maybe they can get a job over the summer. Summer jobs are a great way to learn responsibility. It can teach them about what employers expect and how much one works to earn money.

Maybe they can start a side business to earn extra money from babysitting, cutting lawns, or pet grooming and walking. Another way of making money is clearing out their room and holding a yard sale. By this age, they’ve collected items from prior years that no longer entertain them. Why not turn those items into cash?

  • Stock market. Give them a pretend amount of money and have them “invest” in a company that interests them. Evaluate the stock’s performance over a period. Discuss what current events may be driving the prices and causing the values to fluctuate.

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