Save money on transportation costs

This was originally published on Monday, January 23, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

When it comes to saving, every little bit counts. But when you are on a tight budget, sometimes finding that little bit can be difficult.

The second-largest purchase for most is your vehicle. Owning and operating your vehicle also accounts for the second-largest expense. The model budget suggests that 15 percent to 20 percent of your budget should be dedicated to transportation. This includes your car loan, insurance, fuel and maintenance.

Here are some tips for saving on transportation costs.

  • Drive sensibly. Hard braking, rapid acceleration and speeding are the quickest way to waste fuel. The Department of Energy’s website states aggressive driving can lower your gas efficiency by 33 percent. Over time, you will save hundreds of dollars on fuel and maintenance costs.
  • Regular servicing. Take your vehicle in for routine checkups. Change your oil at the manufacturer’s suggested times. Rotate tires as needed and keep the engine tuned. Keep tires inflated to the proper pressure. Doing these simple tasks can save hundreds over the year.  Preventive maintenance also gives your mechanic a chance to inform you of any potential issues you may need to address before it becomes a serious problem and costs more to repair.  Purchase a tire pressure gauge and check your pressure once a month. Inspect your tires when you check your pressure. Look for uneven wear, low tread or items stuck in the tire. Improperly inflated or over-worn tires don’t just lower your fuel mileage, it can also lead to flat tires or blowouts.
  • Don’t idle. We all know it is hot on Guam, but letting your vehicle idle while waiting for someone to “just run in and out” can eat up your fuel. It’s much more sensible to shut your vehicle off and start it back up when you are ready to leave.
  • Air your car out. Getting into a hot car and turning the air conditioner on right away doesn’t allow for the heat to escape. Instead, the air conditioner must work harder to remove the heat and cool the car. A hard-working air conditioner uses more fuel. Save some money by driving a little while the car cools off before turning on the air conditioner.
  • Use the correct motor oil. Read your owner’s manual and use the recommended grade motor oil. The incorrect motor oil can increase the friction in the engine causing it to work harder. Look for the motor oil that reads “energy conserving” on the label.
  • Teenage drivers. If you have a teenager who earns good grades, they may be able to qualify for a discount on your car insurance. Insurers see good grades as a measurement of responsibility.
  • Do-it-yourself. If you are good with your hands, consider doing minor car repairs. The internet is full of tutorial videos that can walk you through changing wiper blades, lights, fuses and other small maintenance necessities. Even changing your own oil can save you money. If you aren’t sure how, ask your friends or family if they are knowledgeable on minor car repairs.
  • Car parts. Car parts are quite expensive. If the part isn’t available here, ask your mechanic what part number is needed and look for the item online. You’ll be surprised at the difference in prices. If they don’t ship to Guam, ask a friend or family member in the U.S. mainland, send the part to them. They can then forward it to you.

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

Small things can give big savings

This was originally published on Monday, January 16, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

When your budget is tight, it’s hard finding ways to save. Sometimes, the simplest little tips can make a huge difference.

Start your new year off right and start saving money. To start, switch your thoughts from being a spender to being a saver. Through practice and persistence eventually saving will become natural and yield long-term results.

  • Pay for what you need. It is normal to want to live comfortably but rent or purchase a home that is within your price range. Paying for extra space is not practical.
  • Refinance your mortgage. Take advantage of lower interest rates. If you lower your percentage even by half a percent, you can save thousands of dollars over the life of the loan. If you have a $100,000 fixed mortgage for 15 years and change the interest from 7 percent to 6.5 percent, you can save $5,000 in interest charges. If you can handle higher payments, consider a 15-year mortgage versus a 30-year. Let’s say that same $100,000 at 7 percent is for 30 years. If you convert it to a 15-year mortgage, you can save more than $75,000. If refinancing costs will exceed the savings, keep your existing mortgage and pay more every month. This effectively results in savings as well.
  • Insurance. If you rent a home, be sure you purchase renters’ insurance. Know what you are covered for and pay only for what you need. Ask about discounts for which you may be eligible. Bundling your car, home and life insurance can also reduce your bill.
  • Weatherproof your home. Evaluate your home for holes and cracks that let warm air in and cool air escape. Talk to your local hardware representative for the best types of materials to plug the areas of concern. Spending a little more on the best grade material will save you more.
  • Window treatments. Living on Guam, we receive a lot of sun, which heats our homes. Purchase window treatments that block the sunlight and keep the house cool. Consider tinting your windows to keep UV rays out of your house as well. Many residents use their storm shutters not only for storm protection but to keep the sunlight out too.
  • Plant trees. If you put in trees on the sides that are most exposed to the sun, the shade they provide will keep the house cool.
  • Roof coating. There are all sorts of different roof coatings. When recoating your roof, choose one with good reflective properties and that’s guaranteed to last long. Keep your roof white by water blasting periodically.
  • Convert lightbulbs. Old incandescent lights may cost less to replace but overall they consume much more power and also create heat. Slowly convert your lightbulbs to CFL or LED .
  • Conserve water. Inspect your home for leaks and drips. Pay attention to the sound of running water, especially when no one is using water. Water leaks can become serious problems if not fixed immediately.
  • Cable, phone and internet. Pay only for what you need. If you hardly spend time at home, you probably don’t need all the premium channels. Many of the popular channels now have apps to watch on your computer, smartphone and tablet. If you call the U.S. mainland or other countries frequently, check with your provider to see if they have calling plans. Bundled plans are also a good way to save money.

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 saving money in 2017

This was originally published on Monday, January 9, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Q: I want to start saving more in 2017, but I always find myself barely making it to the next payday. Living payday to payday is difficult and saving money on a tight budget seems almost impossible. Do you have any tips that you can share to help me find money to start saving?

I commend you for wanting to start saving. You are not alone. Many people find it hard to save money, especially with the cost of living. I’m not going to sugarcoat it — saving may mean having to give up certain luxuries and reprogramming the way you think about spending money.

If you stick to it, you will find that once you get going and see your progress, you will continue to save and eventually it will become automatic and not so tedious. Some of the tips I have may not fit your lifestyle. Pick the tips that best suit you. If it doesn’t work, try something else. The important thing is to keep saving a little at a time.

  • Record your spending. Most people think they know exactly where their money goes. The truth is you will be surprised to learn how much you spend on nonessential items. Save the receipts of all your purchases and expenses. At the end of the month, make two categories: essential and nonessential. In the essential category, include your rent/mortgage, insurance, groceries, loan/debt payments, fuel and any other payments you must make. Under the nonessential category, include your impulse and entertainment expenses such as coffee, eating out, game or music downloads, cigarettes and other items you don’t necessarily need to survive.
  • Credit cards. Credit cards are a great way to build credit, but using credit cards to pay daily expenses can really be draining your savings potential. Most credit cards have high interest rates. Unless you pay your card off at the end of the month, you will be paying hundreds of dollars on a cup of coffee by the year’s end. Use your credit card sparingly and you can save hundreds, even thousands, of dollars.
  • Tax time. Be sure that you are getting all the exemptions for which you are eligible. It may cost a little, but see a financial adviser or tax preparer. You may be eligible for some tax breaks that you didn’t know existed. Use the tax savings to pay down some debt or put it in a savings account.
  • Compare prices. Many people overlook this tip because it does take a bit of time to do your research. Before going grocery shopping, compare store circulars and sales. A little research can save you a few hundred dollars a month. Compare prices for expensive items as well. Home and auto insurance is another expense for which you can compare prices and save.
  • Earn extra money. You don’t have to get another job, but you can use your free time to earn money. Ask your family, friends, or neighbors if they have any jobs around the house that they need done. Baby-sitting, car washing, house painting, yard work, house cleaning and other jobs can bring some additional cash. Put some of the extra money earned in a savings account and use some of it to pay off debt.
  • Think before you spend. It is nice to treat yourself every now and then, but evaluate before purchasing. If you want to purchase a $60 dress and you make $10 an hour, is that dress really worth six hours of work? Sometimes reminding yourself of just how much you work to earn your income can put how you spend your money into perspective.
  • Use cash only. It’s hard to know what you are spending when you use your debit or credit card. If you use cash, you can literally see the cash depleting from your wallet. This can help you break the cycle of overspending.

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

Ways to save money this year

This was originally published on Monday, January 2, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Through the years I have stressed how important it is to have some sort of savings account. If you are still searching for a New Year’s resolution, think about starting a savings account or adding to the one you already have. There are several ways you can make savings easier and less imposing.

Here are a few to consider:

  • 52-Week Challenge. This is a popular challenge because it requires you to put some money aside weekly and, depending how much you put in, by the end of the year you can have a sizable amount set aside.  On the first week of the year, put a dollar aside. Week two, put $2 aside. Week three, put $3 aside and so on, until the final week of the year you will add $52. By the end of the year you will have saved $1,378. If $10 in the first month doesn’t motivate you enough, try starting with $52 the first week, $51 the second week, and keep adding less each week. In the first month you would save $202, and you can open a savings account with that money and start earning interest for the rest of the year.  It is also a good idea to save more at the beginning of the year so that you have enough money to spend on the holidays.  Pick an amount, any amount. Choose any amount you want to save for the week, from $1 to $52. As you save each amount, scratch it off the list.  This way gives you more flexibility and you are more likely to stick to the challenge.
  • Bi-Weekly Challenge. If you get paid every other week, this may be easier to save money. Just add the denomination of the two weeks together. For example week one plus week two will equal to $3. Next pay period add week three plus week four for $7. By the end of the year you will have saved the same amount as the weekly challenge.
  • Double the Challenge. Double the amount saved every week. Week 1 save $2, Week 2 save $4 — by the end of the year you will have saved $2,756.
  • Five times the challenge. If you are really ambitious, try multiplying the corresponding week by five. Week one save $5, week 2 save $10, week 3 save $15 and so on. By the end of the year you will have saved $6,890.
  • The “No Spend” Challenge. This challenge really forces you to be conscious of where your money is spent. For a month, spend money only on necessities such as rent, fuel and groceries. Don’t spend money to eat out (even for lunch), coffee, movies or even a pack of gum. At the end of the month you will be surprised just how much money you save.
  • Spare Change Challenge. How many times have you gone to the store and received coins? Many of us at the end of the day place it in a jar and forget about it. This challenge includes not only the coins but dollar bills as well.  At the end of every day, place your coins and dollar bills into a jar.  At the end of the month, take the jar to your bank and deposit it into your savings account. Get the whole family involved to really make an impact.
  • Declutter Savings Challenge. The holidays have passed and we probably are playing with our new toys or gadgets while the old ones sit around the house gathering dust. The new year is a perfect time to declutter your home.  Go room-to-room, including the kitchen, and look for items that you haven’t used in the last six months. The kids’ rooms are a gold mine of shoes, clothes, toy, and books that they have outgrown.  Once you have all the items gathered, sell them at a yard sale. I heard the new Dededo flea market takes one-time vendors. Take the money you make from the sale and put it in your savings account. Do this every six months.

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.  

Teaching kids the value of money is a life lesson

This was originally published on Monday, June 24, 2013, in the Pacific Daily News.  Click here to subscribe to the PDN.

Question: I have a young niece who goes through her allowance as soon as she gets it. I would like to start teaching my niece about money. Do you have any ideas?

Answer: I commend you for recognizing the pattern early. Learning the value of money should begin at an early age. As we grow up, having money is a necessity and being able to properly handle the money we make is a great skill to have. Being financially fit takes practice and it takes correcting if you see a child is irresponsible with money. Adults should layout guidelines about spending, saving and donating to charity.

Children must understand that money is something that has to be earned and not just given out for free through an ATM machine. Having an allowance can be an effective tool for teaching children that lesson. If they want to get paid more, sit down and negotiate, as they would with an employer. Help them understand that not all their allowance has to be spent at one time.

For older kids, getting a prepaid debit card can be beneficial. The child can then spend it anywhere a debit card is accepted. Some debit cards keep record of your teen’s spending so that you can track purchases or know when you need to reload the card. It is a good opportunity to teach teens budgeting skills in a real life scenario.

Help your niece set up a budget. If she has been eyeing a particular pricey item, explain to her how she would be able to get that if she waited an “x” number of allowances. As she gets older, her budget can get a little more complex, such as setting aside 20 percent for savings. You can even make a pretend tax of 10 percent that she must pay you (you can, in return, pay them back every April). For older kids in middle or high school, include their weekly expenses such as, for example, lunch and gas money in their allowance. This lesson can even be done using play money.

Expect children to make mistakes. When you take your niece out shopping next time and she once again spends her allowance on something frivolous, ask her a week later if she is still pleased with her purchase, or if the item is misplaced, or broken, or if she wishes she had kept that money for something else. If she agrees with you that her money could have been better spent, ask her how she will change it next time. Engage her in conversation; although she may make the same mistakes over and over again, she will in time get the hang of it.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and with 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.

Make smart driving choices to save on gas money

This article was originally published on Monday, 11 March 2013 as the Money Matters article in the Guam Pacific Daily News (PDN).  Click here to subscribe to the PDN.

The rise in our cost of living has forced us to be creative with how we save and spend our money. We once again have seen the price of fuel go up and down. Let’s face it. The price of fuel may never be back to $3 a gallon or less. We cannot control the price of gasoline or how it affects our cost of living but we can control our consumption and ultimately our spending.

Maintaining your vehicle and your driving performance can increase or decrease your vehicle’s fuel efficiency and gas costs. Consider some of these tips which can increase your savings:

•Speeding, rapid acceleration and braking increases your car’s fuel consumption. Guam’s stop-and-go traffic can make this difficult. But leaving earlier, giving room between you and the car ahead of you, and curbing road rage will put money back in your pocket. It can lower your gas mileage by as much as 5 percent. That’s equivalent to saving about 17 cents per gallon. In addition to that, following the speed limit is safer for you and others and decreases your chances of an accident, which in turn could keep your car insurance rates down.

•Plan ahead and think of the route you’ll be taking. Combine errands into one trip. Your car uses more fuel when it takes small trips and starts off cold versus when the engine is warmed up and efficient after one longer trip. Cut back on unnecessary travel.

•If you can, try carpooling with family, friends, or co-workers.

•Avoid having your car idle for long periods of time when parked. Guam is hot and we often leave the car running to keep it cool. Unfortunately that wastes gas.

•Speaking of keeping cool, turning your air conditioning to max also increase fuel consumption. Keep the air temperature at a comfortable level. Using your air conditioner’s re-circulate function also uses less fuel by re-circulating cool air from the cabin rather than having to constantly cool warmer air taken from outside of the car.

•Keep your tires properly inflated. This is a simple and inexpensive way to improve your car’s gas mileage. You can improve your gas mileage by up to 3.3 percent for an equivalent savings of 13 cents per gallon. Most vehicles today have the recommended tire pressure on a sticker on the inside of the driver’s door

•Take your vehicle in for regular maintenance. Clogged air filters, faulty oxygen sensor, or a car out of tune can greatly decrease your car’s performance and increase your car’s fuel consumption.

If you’re in the market for a vehicle, take into consideration how fuel efficient the vehicle is. If it’s a new car the mpg usually is displayed as a sticker on the windshield. Do note that highway mpg and city mpg are different. Because Guam doesn’t have highways, it’s best to look at the city mpg, which is most appropriate for Guam’s stop-and-go traffic.

If you are considering a used vehicle you still can find the mpg at www.fueleconomy.gov. This website also has tips from the U.S. Department of Energy on saving money and fuel.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years experience in retail banking and with 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.