Plan to fund your family vacation

This was originally published on Monday, May 22, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Next week is Memorial Day and that officially kicks off the summer travel season. Planning and budgeting the cost of your vacation can vary wildly depending if you are taking a week-long trip to Saipan or flying to Orlando for the whole month.

Once you know approximately how much you are going to spend, the challenge then becomes funding for all that fun.

Sacrifice today for fun tomorrow. Reduce how often you eat out to once a week or once a month. Pack your lunches to work and school. You will be surprised how much you spend on dining out. Cut back on how often you get your hair cut or instead of going to the movie theater wait till you can rent it and watch it at home.

Get everyone involved. Encouraging the kids to help by babysitting for friends or family, washing cars or cutting lawns for the neighbors is a great way for children to earn some extra money to help toward the family’s vacation goal.


Holiday spending. There is one time of year that could potentially harm your vacation budget and that is the upcoming holiday season. Talk to your family and remind them of what you want to do. Create a slimmed down version and agree to stay within a certain amount.

Do the same for birthdays and other occasions. For extended family or friends, be creative and make homemade gifts or offer your talents or services instead of material goods.

Tax refund check. If you received a refund you can use it toward saving for your vacation. You don’t have to save it all for the vacation. You can divide the check up many ways.

Extra income. This is a great way to increase your savings for that dream vacation. Extra income does not have to be a formal second job. It could be selling your talents. If you can bake, sell your baked goods to friends or during the holidays. If you are a good seamstress, offer to alter clothing for your friends. Maybe you’re a skilled mechanic and can help with oil changes.

Let others know. Let your friends and family know what you are planning. You may inform them that this year you would prefer money instead of a gift. There are several websites that you can use to ask friends and family to donate. Your friends and family can make a gift or donation to your cause directly online.

Don’t forget to keep track of who helped. While on your trip you can pick up little thank you gifts or create a thank you collage of all the wonderful places you visited.

Stay motivated. There will be days when you are tired of eating that same sandwich you packed for work three days in a row. But before you go out and regret spending the money you are saving, find ways to motivate yourself to keep on going. Put pictures of your dream vacation on your fridge, on your screen saver or even in your wallet next to your credit cards and 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 and read past columns at the Money Matters blog at


Consider your possible tax deductions for 2013

This was originally published on Monday, February 10, 2014, in the Pacific Daily News.  Click here to subscribe to the PDN.

Getting started on your taxes is always overwhelming, but once you collect and organize the necessary documents and decide if you will be itemizing or taking the standard deduction, then you are halfway there.

The next step is to start thinking about any major life changes that you experienced during 2013. Did you get married or divorced? Did you have a baby? Retired or start a new job? Did you or a family member start college? Or did you buy or sell a house?

The Internal Revenue Service, IRS, usually has a tax break or payment associated with major life moments.

Here are some deductions to think about:

• Extra income/winnings. When filling your taxes, you must include not just your wages, tips or interest you made on bank or stocks, you may have to report other types of miscellaneous income as well. If you won a prize through a raffle, contest, drawing or an award, the cash value of the prize is taxable. Also, the winnings from poker tournaments, lotteries, bingo and other gambling income must be taxed.

• Other income, such as child support, inheritance, welfare benefits or gifts are usually tax-free.

• Court. If you appeared in court and are instructed to pay for punitive damages, this most likely will be taxable. On the other hand, if you were awarded money or won a settlement for personal injury or sickness, you most likely will not have to pay taxes on them.

• IRAs. Also if you took money out of an IRA, you most likely will have to pay taxes. Money taken out of a Roth IRA is usually tax-free. Although your IRA contributions must be deducted from your paycheck before the end of 2013, you can still make contributions to your IRA through April 15, 2014, and it will count on your 2013 tax return.

For more information on whether you are to pay taxes on your extra income, go to the IRS website,, and download IRS Publication 525, Taxable and Nontaxable Income.

• College. If you or your child(ren) attended college in 2013, you may get up to $2,500 from the American Opportunity Tax Credit or up to $2,000 from the Lifetime Learning Credit. Most universities or colleges will send you Form 1098-T. Note that you can only report the amounts that you actually paid in education expenses throughout 2013. To help you, go to the IRS website and find the Interactive Tax Assistant for step-by-step assistance.

• Social Security. If your only income during 2013 was your Social Security benefits, your payments are not taxable. If you had other income during 2013, you may have to include your Social Security payments as income.

Taxable benefits

According to the IRS, here is how you decide if your benefits are taxable:

• Take one half of your Social Security payments you received during the year and add it to your other income(s) such as pensions, wages, interest, dividends and capital gains. If you are married and filing jointly, perform the same calculations for you and your spouse’s income using one half of both of your incomes and adding it to your other incomes.

• If you are single and your total comes to more than $25,000, then your benefits may be taxable.

• If you are married and filing jointly and your sum is more than $32,000, your benefits may be taxable.

• If you are married and filing separately, your Social Security payments may be taxable no matter what the sum is.

To learn more if your Social Security payments are taxable, use Publication 915.

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