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 moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

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Are you financially prepared for a disaster?

This was originally published on Monday, August 15 ,2016 in the Pacific Daily News.  Click here to subscribe to the PDN.

As our summer months come to an end, we head into the rainy season. The rainy season is usually the time a majority of our typhoons visit. Although Guam has been fortunate not to experience a major natural disaster in some time, we should always be prepared.

When we think of disaster preparedness, many might think about being physically prepared. Is my backup generator working? Do the shutters need oiling? Do I have enough nonperishable food in stock? These are great questions to help you prepare, but consider preparing yourself financially as well. Being prepared financially can help you recover from a natural disaster much faster and with less stress.

There are many important documents that are needed to financially prepare for a disaster. Gather your documents, then review them to see if they are updated or need to be changed to fit your needs. Keep them in a water-resistant container that is portable, and place it in a secure location that’s easily accessible.

Personal information. Gather necessary personal information on everyone in your household. Generate a list with your name and your spouse’s and children’s names. Include their date and place of birth. The list should also have the physical residential address, mailing address, home phone number, and work and cell phones. Employment information for all those that work should be added as well. List emergency contact information of those who don’t live in your home.

Make front and back photo copies of driver’s license, military ID, work badges, and any other sources that can be used as a form of photo identification. Keep at least one original birth certificate and several copies in your emergency files along with marriage certificate, divorce decrees, death certificates, adoption papers or child custody documents. Original copies can be obtained from Public Health and Social Services for a small fee. Also include copies of passports, green cards, naturalization documents and Social Security cards. If you’ve served in the military, keep a copy of your discharge record, DD214, and any other military career information. If you have pets, include microchip information, medical records, proof of ownership, registration paperwork, and photos of you with your pet.

Medical information. Keep a list of your primary health care provider, dentist, or any specialists that you see. List their clinic’s name, physical address and phone number. The list should also contain any allergies and medical conditions or disabilities each family member has. Every family member should have a list of medication taken on a regular basis. You may even want to add eye glass prescriptions. Make copies of your medical insurance card, Medicare card and Medicaid card. Another item you will want to include is a copy of the most updated immunizations records. Most importantly, include your living will and medical power of attorney.

Housing information. Proof of home rental or home ownership is vital if you require federal disaster assistance. You’ll need a copy of your lease agreement or mortgage. If the house was deeded to you, you’ll need the deed. If you took out a second mortgage on your home, include that as well. All other loans or financial obligations that tie to your home should be included as well.

If your home is destroyed and uninhabitable you are still responsible for paying your mortgage. If it’s not possible to make your mortgage payments, contact your bank as soon as possible to avoid extra fees or the possibility of a foreclosure.

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.