Tips for saving for your vacation

This was originally published on Monday, May 15, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Another summer is just around the corner. Vacations should be fun and memorable. You wait all year for it to come around.

But going on vacation, especially if you plan to travel to far off locations, can put a good dent on your wallet. You may not be ready to fly off to your dream location this summer, but by saving a little here and there you can start getting closer to it.

Here are some tips on how to save money for that dream vacation.

  • Create a vacation account. This is just for vacation purposes. Just like buying a car or any other high-end purchase, you should always start saving money. The account should be separate from the account that you use regularly. Consider opening the account at a different financial institution from your regular checking account so it isn’t easily accessible or tempting to use.

Read terms carefully. You wouldn’t want to spend vacation money paying fees. If possible, have an allotment or payment directly from your paycheck to the vacation account. That way you aren’t tempted to use that money for anything else. Your vacation account can also be used during your trip as an easy way to track your spending while traveling.

  • Examine your budget. Is there something you can cut out or reduce? Maybe you can reduce your cable bill by removing premium packages, or cut your entertainment expenses. Create a special category in your budget just for your vacation.
  • The spare-change jar. This may sound a little old fashioned, but you will be surprised how much money you can save. How much change do you have around the house? After you purchase something, what do you do with your change? If you put just $2 in change in the jar every day, you will have $730 by the end of the year. Imagine what your total will be if everyone in the family participated.
  • Liquidate. We all have things we no longer need — an old game console, desktop computer or VHS player collecting dust. It can be earning you money instead. Place them on eBay or Craig’s List. There are even websites that will offer you money for your old cellphones. You can have a yard sale or take your stuff to a flea market. Get the kids involved by having them collect their outgrown clothes or toys to sell. Make it a game to see who can sell the most.
  • Pantry meals. One of our biggest expenses is food. How much do you spend on groceries in a week? Most of us never completely empty our pantry of canned or boxed goods. To help save some money, take a week out of the month and use only what is in pantry and fridge. This could save you hundreds of dollars and clean out old cans and food you may have forgotten about.

A few financial rules

This was originally published on Monday, April 24, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

As April comes to a close, so does Financial Literacy Month. In these times of economic uncertainty, money management is a necessary life skill. Many of us are not taught how to handle money or prepare ourselves for the future.

Most of the time, we learn as we make mistakes. Sometimes we bounce back, but sometimes it is a life of continuous hardship. Being prepared makes a huge difference when dealing with money management.

Here are a few rules:

Plan. You can’t go through life not having financial goals. The only bad plan is a plan not followed. You must plan for your future. Plan for all your major expenses like home ownership, a car, schooling and periodic expenses.

Goals. What are your short-term (less than one year), mid-term (one to five years) and long-term (more than five years) goals. Make sure your goals are specific and reasonable.

Develop a budget. Determine your living expenses, periodic expenses and monthly debt. Create a budget that can be realistically followed. Follow your budget as closely as possible and evaluate it at least twice a year.

Keep your expenses under control. Try to spend only the money you make and not use your credit cards. Do not incur other debt until you are able to manage the debt you have now. Know where your money goes by keeping a log of all your purchases.

Save. Save up for major purchases such as cars, homes, vacations and major appliances. Experts say that saving 10 percent of your paycheck will add up to a nice savings account. Create an emergency fund with about three to five months of your expenses. Start saving for retirement — the sooner the better.

Need vs. want. Sometimes we have a hard time distinguishing between the two. Needs are must-haves to survive and wants are things we crave. We may need a new car, but we may want a car that is beyond our financial means. Determine your financial priorities to guide your spending choices. Take care of your needs first. Then, if you have some money left over, you can use it for your wants.

Credit. If you must use credit, do so wisely. Use credit for planned purchases only. Determine what amount you can afford to purchase on credit. A golden rule is not to allow your payments to exceed 15 percent of your net income. Do not use one form of credit to pay another and repay the credit back as soon as possible.

Treat yourself. What good is working if you can’t enjoy your money? Even if it’s a little treat like ice cream or a dinner out, enjoy the fruits of your labor, or it will become very hard to follow a budget or stick to your goals.

Don’t get consumed by material things. Trying to keep up with the Joneses will only lead you to financial ruin. Live an enjoyable life but within your means. A 70- inch flat screen television is nice, but so is living debt free.

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

Planning helps you get the most savings out of vacation

This was originally published on Monday, September 9, 2013, in the Pacific Daily News.  Click here to subscribe to the PDN.

Family vacations are a great way to relax and create lasting memories.

They can carry a hefty price tag, but that dream vacation is not out of reach, even if you are on a tight budget. Once you have saved money, you want to make sure you get the most bang for your buck.

• Sooner the better. Book airlines, hotels, car rentals and amusement parks in advance, play around online with different dates to see how much you can save.

• Off-peak traveling. Most of us feel that summer is the time to travel, but you can pay much more during these busy travel months. Think about the week of spring break, the four days of Thanksgiving, or a few weeks before or after summer break. Talk to your children’s school. Schools are willing to work with you by giving your children’s schoolwork in advance or staying connected via emails. Schoolwork is a great way to keep kids busy on an airplane. The day of the week that you travel or stay also can affect your budget. Be flexible.

• Use your privileges. Use the discounts offered to you through your credit cards, airline or hotel memberships. Many vacation services and destinations partner up and offer discounts. If you belong to an organization such as American Association of Retired Persons (AARP), make sure you contact them for vacation offers and discounts.

If you are a military member or retiree, ask for discounts while you are traveling. You may be surprised how many locations offer military discounts to thank you for your service. Check with your recreation services on discounted tickets to amusement parks or museums. Many services offer lodging worldwide (http://www.dodlodging.net), and some even offer great destinations such as Kauai or Naples. If you are really flexible and would like an adventure, try flying space available (MAC Flights). You earn these privileges, so take advantage of them.

• Lodging. Hotels are expensive, but there are some other options. The most inexpensive option is staying with family or friends. You can satisfy the obligatory visit and save on lodging.

If you are staying in a location for a while, find an extended trip hotel that offers suites you can rent by the week or month. They are usually cheaper than hotels and offer all the amenities of a home, including a fully functioning kitchen.

You also could look for a hostel, a budget-oriented dorm room usually with shared amenities.

You also may try camping in our nation’s parks like the Grand Canyon or renting a home or condominium. Also, look for kid-friendly hotels that offer free lodging for children under a certain age.

• Eating. Food is one of the biggest expenses while traveling. If you booked lodging with a microwave and refrigerator or kitchen, prepare your meals in your room. Going to the grocery store can be just as exciting as trying products that you can’t find on island. I am always amazed at the availability and choices of fresh fruit and vegetables when I shop in the US. Some grocery stores even offer a deli with full meal choices. Look for a farmers’ market and get fresh produce.

• Remember the small stuff. Tips, fees and taxes all add up. Bring your children’s entertainment with you.

Don’t use the small stores in hotels or amusement destinations as they cost much more.

Travel light as baggage fees can be very costly.

You will gain clothes, toys and much more during your travels. It can be much less costly to mail them home.

Look for areas with free WiFi.

Also remember that if you take your cellphone, you may incur some hefty roaming charges. If you want to take your phone, have your data services suspended before you leave.

You also may want to consider purchasing a prepaid phone that you can purchase at any large chain retail store. Using the phone in a hotel can create a much larger bill.

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/