Start your financial journey right

This was originally published on Monday, June 5, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Question:  I am a recent college graduate and was lucky enough to be hired just before graduation.  I will be moving out of my parents’ home next month and will be moving into a rented apartment. Although I feel my financial health is good, I want to ensure it stays that way.  Do you have any tips for a new graduate?

Answer:  Congratulations on your college graduation!  When you are moving out of your parents’ home, entering the workforce and becoming responsible for more financial obligations, you may start to question your financial priorities. It is important to start off on the right foot.  The habits you create now can have a huge influence on how you manage your finances later in life.

Keep your frugal student lifestyle: Although your new income is exciting, it is very easy to get caught up on spending. Consider ways to keep your living costs low, such as living with roommates, driving your car a couple of years longer and limiting unnecessary spending.

Take full advantage of employee benefits: As you start your new career, retirement seems far away.  Even though retirement is not in your near future, it is important to start planning.  It will take many years to build a nest egg that will make retirement comfortable.  If your employer offers matching contributions to a tax-advantaged retirement account, take full advantage of it. By not contributing enough to earn the full match, you are basically turning down free money. Besides retirement, also take advantage of other benefits offered like health insurance, short- and/or long-term disability insurance or life insurance at attractive group rates.

Create and stick to a budget: This is a habit that will benefit you for years to come. Even small unplanned purchases can hinder your financial goals.  Be sure to set money aside for savings and other big purchases like a car or even a home.  Download a user-friendly app for your smartphone to help you track your expenses.

Emergency budget:  Plan for the unexpected such as an unforeseen car repair, a medical issue, or home repair.  This account is strictly for rainy days.

Work on your credit score: The best way to improve your credit score is to pay all your bills on time, every time. Another way is keeping your credit spending in check. Do not over extend your credit limit by taking out more loans.  Keep your existing credit cards open. It proves the length of your credit history which also affects your score.  Know what your credit score is by obtaining your three free credit scores annually.

Protect your personal information: Personal identity theft continues to grow especially as we rely more and more on technology for banking, shopping and other online financial transactions.  Once your identity is stolen, it takes a long time to repair and rebuild it.  Cross-shred all documents with your personal information.  Change your passwords often and keep PIN numbers safe.

Pay off higher-interest debt first: Like most recent graduates your student loans make most of your debt. You may also have some credit card debt. Putting as much as you can toward the higher-interest debt first will save you money and allow you to pay it off quicker, giving you more money to put toward your student loans.

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 and read past columns at the Money Matters blog at

Be familiar with credit score

This was originally published on Monday, October 31 ,2016 in the Pacific Daily News.  Click here to subscribe to the PDN.

Halloween is a time to be spooked by zombies and witches. As we grow older, our fears become less of the supernatural and more of the actual. In the personal finance world, many fear the unknown such as their credit score.

Your credit score is your financial report card. It lets you know how well you are doing financially. Your credit score is a tool used to measure how reliable you are in repaying your debts. Your credit score is also known as your FICO score.

Fear stems from the unknown. If you take time and understand what and how your score is calculated perhaps it would be less scary.

There are three credit bureaus that keep track of your score: Equifax; Experian and TransUnion. The three bureaus usually have three different scores, because each company uses your information differently and not every credit issuer reports to every bureau.

There are five major factors that go into calculating your score.

  • Payment history is about 35 percent of your score. This factor will show lenders your accounts, past or current. This section also tells the bureau how well you meet your payment deadlines and if you are behind, how many days you are past due. It also reports if you have missed payments. This category also shows if your accounts have been turned over to a collection agency or if you have filed for bankruptcy.
  • Current amount owed will factor for about 30 percent of your credit score. Recorded in this area are the number of credit accounts you have such as credit cards, loans, mortgages or in-store credit cards. Your balance on each account is also noted. High balances or large amount of debt from many sources will lower your score. Also, having a lot of credit with no debt could have an adverse effect on your score. Usually small debts that are paid off in full will raise your score.
  • Length of credit history will calculate for about 15 percent of your score. This section concentrates on how long you have maintained your credit. For most creditors, time equals stability. Having a credit card but not using it can actually drop your score compared to carrying a balance on a few different accounts and paying them off on time.
  • Types of credit used will count towards 10 percent of your score. Being more varied in the types of accounts you use will increase your score. A person who carries only one credit card may have a lower score than a person who shows that they can responsibly manage more than one account.
  • New credit inquires accounts for the last 10 percent of your score. There are two types of inquires that can be made a soft inquiry and a hard inquiry. A soft inquiry can be from a financial institution or potential creditor just wanting to look at your score, a perspective employer or you viewing your credit history. Soft inquires don’t affect your score. Hard inquires come from a financial institution that you have applied for a line of credit or loan, such as a car dealership. The increase in hard inquires lowers your score. Usually, if someone has opened a lot of accounts in a short time period, it may suggest potential financial troubles.

Become familiar with your credit score. It’s a valuable tool that can keep you from being frightened of your financial well-being.

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 him to cover, email him at and read past columns at the Money Matters blog at

Don’t be an easy target for identity theft

This was originally published on Monday, April 25 ,2016 in the Pacific Daily News.  Click here to subscribe to the PDN.

Having your identity stolen is one of the hardest things to repair because you are never sure how extensive the damage is. Perpetrators of identity theft may not even be in your area. They could be hundreds of miles away or halfway around the globe. They do not have to physically come in contact with you.

So how do you minimize the risk of being robbed of your identity by a thief you can’t even see?

It takes some extra steps and new habits and being aware of what you do with your personal information.

  • Credit Report. One of the biggest signs that you have had your identity stolen is the use of your financial accounts. Your credit report contains a lot of personal and financial information. Look for accounts that have been opened in your name or monthly bills for which you are not responsible. If you have been in a situation where your information has been compromised, monitor it closely. You can receive three free credit reports a year, one from each of the reporting agencies. Request your free credit report at
  • Be nosy. When giving your personal information don’t be afraid to ask questions. Why do you need my Social Security number? What is the information for? How do you secure or dispose of it? Be very careful with whom who you give your information.
  • Secure your information. Place your passport, Social Security card, birth and marriage certificates, insurance policies, and financial statements in a safe or file cabinet. Do not leave that information lying around for prying eyes to view.
  • Mailbox protection. Purchase a mailbox that has a durable lock. Check your mail frequently do not let your mailbox get too full that mail cannot be placed in it. If you are utilizing home delivery place your mailbox in an area that is well lit and visible to everyone.
  • Destroy documents. Be sure to cross-shred your bills, financial statements, medical information, or any documents containing personal information. Look for a shredder that cross-shreds papers and can shred old credit cards.
  • Shopping. Be sure to use secure websites that start with “https” in the web address when shopping online. Some web browsers utilize little green locks to show that the site is secure. When shopping in a store keep your wallet on you at all times. Try to keep your credit card in sight at all times. Always get a customer copy of your receipt.
  • Protect your passwords. Nowadays there are passwords or PINs for everything we use. Try not to use the same numbers or words. Do not use birth dates, names, phone numbers, or other personal information for your passwords. Change your passwords at least every six months. If possible use lower and upper case letters with symbols and numbers. Always remember to log off from your accounts.
  • Do your homework. As technology changes so do the methods that identity thieves use. Keep abreast of the new ways hackers and identity thieves operate. Utilize new software and techniques that companies invent to protect you. There is a lot of useful information online.
  • Use your gut. If you feel that something is not quite right, trust your instincts. If something is too good to be true it probably is.

Protecting yourself requires a bit of work but it is a lot less than the many hours needed to repair the damage of getting your identity stolen.

Create habits that help you and you family protect your personal information.

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 and read past columns at the Money Matters blog at

Protect yourself against identity theft

This was originally published on Monday, July 7, 2014, in the Pacific Daily News. Click here to subscribe to the PDN.

Question: My sister recently found out that her identity was stolen. She has been informing me of how difficult the process is to rectify the situation. Are there any tips you can provide that can help prevent this happening to me?

Answer: Identity theft is a serious problem and continues to grow worldwide. People are affected by it every day. There are numerous ways an identity can be stolen. It can be done using technology through online “phishing” scams or emails or through unsecure Wi-Fi spots. Other ways are more traditional like using information from a lost or stolen wallet or dumpster diving in your trash.

According to, identity theft is defined as “the crime of obtaining the personal or financial information of another person for the sole purpose of assuming that person’s name or identity in order to make transactions or purchases.” Consider every aspect of your information a puzzle piece. Once identity thieves collect enough pieces they can start putting it together to know more about you. The more pieces they collect the easier it is for them to steal your identity. Once your identity is stolen it can ruin your credit rating, personal reputation or even chances of getting a job. Although you may not be able to keep all the puzzle pieces out of the hands of identity thieves, you can make it more difficult to obtain. Here are a few tips:

• Social Security: Your Social Security number is one of the most important pieces of personal information you own. Think about what you have used your Social Security number for — jobs, college, banking, licenses, taxes, health care and much more. Think twice before giving anyone that information. Never carry your original card or any information with your Social Security number in your wallet or purse.

• Wallet/purse: Because we carry these items everywhere the chances are that one day it will be lost or stolen. Our wallets carry a lot of information about us. Photo copy everything in your wallet and keep it safe. This will help you remember what was in your wallet and who you will need to contact. It is hard to remember the user names, passwords and pin numbers for everything but do not keep that information in your wallet or purse.

• Mail: You receive and send a lot of financial and personal information in the mail. If possible ask banks if you can pick up checks and credit cards at the bank instead of mailing them to you. Use security envelopes for important documents. If the document is really important, consider spending a little more money on sending it certified. Pay attention to your mailing cycle. If your bills arrive late, contact the sender.

• Trash: We throw away a lot of personal information. If someone was to rummage through your trash, they could find credit card and bank account numbers, health insurance and more. Before throwing away anything with personal information, destroy it. Using a cross shredder works best. Shred receipts, old credit cards and statements. Black out your name and other personal information on medication bottles when disposing of them.

• Financial account: Keep current on all your financial accounts. Review your monthly statements and check them against your receipts. With today’s technology you can check your accounts a lot more frequently and in real time. Look for irregular withdrawals or charges or for companies that you have not had transactions with. Keep your receipts and always ask for a copy of the credit or debit card transaction, especially those that were entered incorrectly or voided.

• Credit report: Review your credit report at least once a year. All three credit agencies are required to provide a free review of your report once a year. Stagger your request so that every four months you can review your report. Consider using a secure and reputable credit-monitoring service, which can alert you when there is a change in your report. Correct fraudulent or suspicious activity as soon as possible.

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 and read past columns at the Money Matters blog at