Tips to handle financial challenges

This was originally published on Monday, April 10, 2017, in the Pacific Daily News.  Click here to subscribe to the PDN.

Most of us have some financial uncertainties. Some may be beyond our control, such as unemployment or health reasons. Others may be from overspending or taking on too much debt. Financial challenges arise and it happens to everyone.

  • Overspending. There are many reasons for overspending. It can be because of the holidays, the lack of willpower, or even emotions. I am sure a few of us are guilty of having a bad day at work and bringing home a shiny new object which temporarily lifts our spirits. Overspending usually leads to using credit, which can lead to a dangerous spiral.

Get to know what your spending triggers are. It could be your mood, your friends, certain environments, even the time of day. Keep track of your spending. You will be surprised how something as routine as a daily cup of coffee can add up. Carry cash.

  • Don’t rely on cards. You can see your cash being spent, but using your credit or debit card is a very out-of-sight, out-of-mind behavior. Proactively decide where your money should go and put it aside. Whatever you have left over then can be used to spend on yourself.
  • Save in advance. Do you have a car that needs to be replaced? Are you planning on purchasing a home in the near future? Many of your large expenses are known usually well in advance. Many of us rely on taking on huge amounts of debt instead of saving for it because it is the easier way out.

Even if you take on debt to help pay for the purchase, you still should pay down as much debt as you can. If you save $10,000 for a $100,000 home, the amount you save on interest alone will be doubled after paying off the debt.

  • Too much debt. According to, the average U.S. household has about $16,748 in credit card debt. The average household pays a total of $1,292 in credit card interest per year.

If credit card debt is a major problem, the first step is to stop using the card. Many Americans now depend on their credit cards to pay off other debts. It is a cycle that is hard to break. To stop depending on your card, you must decide where you can cut spending. Decide what expenses you can live without.

Create extra income that can be used solely for paying down debt. Pay off the credit card with the smallest amount and carry that payment amount over to the next card and so forth. Once your credit card is paid off avoid the temptation to use it.

  • Credit score. The 2010 National Foundation for Credit Counseling Financial Literacy Survey states “about two-thirds of adults (65 percent) have not ordered a copy of their credit report within the past year and nearly one in three (31 percent) do not know their credit score.” Your credit score is important because it is the first point of reference that lenders use to judge your trustworthiness with money.

Take advantage of your three annual free credit scores. There are also credit monitoring companies that charge minimal fees.

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


Challenge yourself to make savings

This was originally published on Monday,January 26, 2015, in the Pacific Daily News.  Click here to subscribe to the PDN.

When people think of savings, budgets or debt, they automatically get a heavy feeling of despair. They start thinking of drastic ways their everyday life is going to change. Yes, making changes of any kind takes some effort. Change is always uncomfortable but it does not have to be. I have gone online and found a few New Year’s challenges that you can try.

• 52-week challenge. This is probably one of the most popular and easiest challenges. There are 52 weeks in a year. At the beginning of each week, deposit the number of dollars that corresponds to that week. For week one, deposit $1; for week two, deposit $2; and so on. By week 52, you would save $1,378! You can deposit the money into a jar or savings account. If you deposit it into a savings account you will earn interest.

I have also read that you can start backwards by depositing $52 the first week and $1 the last week. This is beneficial since most of us need that extra money for the holidays. The hardest part is not spending it.

• Track your expenses. For 30 days, track every expense you make, even that $5 purchase for gum and a bottle of water. By week two, you will get a better understanding of your spending habits. Because you can literally see where your money is going, you may start to change before the 30 days are over.

•  Cash Only. This is another 30-day challenge. For 30 days, leave your credit/debit cards at home and only use cash. Having your cards on you makes it easy to stray off your budget and to lose track of how much you spend. By having a limited amount of money, you will make wiser spending choices. After a while, you will get tired of having to run to the bank to make withdrawals.

•  The morning minute. Take a minute or two before you get started in the morning to view your accounts. Knowing what your balance is at the beginning of the day gives you an idea of how well you are sticking to your budget. Review your spending habits from the past day. Watching your balance get smaller is never fun, but you will think twice before making unnecessary purchases.

• Necessity challenge. For a month, pay only for your necessities (food, rent/mortgage, utilities, insurance, etc.). Do not make any other purchases. Do not eat out, buy clothes or go to a movie. This is difficult, but not having these luxury purchases will give you an appreciation for your hard-earned money.

• Spare change challenge. At the end of the day, throw your spare change into a jar and watch it grow. At the end of the year, take your spare change to the bank. You will be surprised just how much you saved. If you really want a challenge, add all your spare $1 bills in as well. Try not to dip into the jar.

• The de-clutter challenge. Every month, go through your clothes, your children’s clothing and toys, and other parts of the household that you can rid of clutter. Once you have enough items, have a yard sale or go to the flea market. You will not get what you paid for them, but you will earn a little extra cash. Or you can donate them to a thrift store. Ask the thrift store for a tax deductible slip that you can use toward your income taxes in April.

There are many more challenges out there. Get creative and find other ways to save. If you really want to add some fun, get your family, co-workers and even neighbors involved. Create an office pool of who can save the most or have a neighborhood yard sale. Challenges are always much more fun when done with others.

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

Survive Black Friday with your budget intact

This was originally published on Monday, November 17, 2014, in the Pacific Daily News. Click here to subscribe to the PDN.

You probably noticed the buzz of the holiday season is quickening. The stores started to deck the halls and the Christmas wish lists are starting to grow. The day after Thanksgiving is the largest and busiest shopping day of the year — Black Friday.

Black Friday is not for everyone; some people would rather stay at home and sleep in after their Thanksgiving feast. But if you don’t mind the early start, the crowds, the long lines and the great deals, then get ready to shop. Here are a few tips to help you prepare you for Black Friday:

• Create a list/budget: Decide who is on your nice or naughty list and how much you can afford. Set a limit and create a realistic holiday budget. Prioritize your expenses and decide how much you want to spend on each. Make a list of those you are buying gifts for, include how much you want to spend and what you want to give them.

The hardest part is sticking to your list and budget. Stay within the budget you set and say no to items that will cause you to go off budget.

• Compare: You know how much you want to spend so the next step is to compare prices between stores. Look through the newspapers, sales fliers and online shopping sites. Some stores will guarantee the lowest prices and may match the price of the item if you bring in the competitor’s sales ad. This may take some researching and time but it will save you money, time and gas if you make one less trip or stop.

• Understand the sales times: Some stores may have Black Friday hours of opening early and closing late. But sometimes the sale prices don’t go in effect until a certain time. Read the advertisement carefully.

• Decide how you will pay: Cash is always welcomed at stores. It is easier to keep track of how much you spend but it can be dangerous carrying around large amounts of cash.

If you are going to use a credit card, use only what you can pay for that month. By paying it off as soon as you get the statement you will avoid interest charges. Some credit cards have a cash back policy if you purchase certain items. Stores may offer extra savings if you open or use their store credit card. These discounts are great offers but treat them as you would other credit cards and charge only what you can pay off. The interest rates on store credit cards can be extremely high.

• Bring along a friend: Not only is it more fun but you can also take advantage of certain sales, such as buy one get one half off. You can also help each other by dividing and conquering each other’s lists. It is always helpful for a friend to hold a spot in line for you while you run off to look for an item. Of course your friend can be a voice of reason when you are tempted to go off budget.

• Be aware of extra costs: There are always little costs that sneak up on you and most of the time we do not realize how much it throws us off budget. Some stores offer warranties especially on electronic items. Check if your credit cards have extended warranties on certain items if you purchase them with the card.

You are going to be out and about for an expanded amount of time and you will get hungry. Instead of buying a snack here and there, bring snacks with you. Stores may offer a discount on items if you purchase two or more. If you do not need two, you will not be saving money unless the second item is free.

• Keep the receipts: You may need to return an item and the only way to do so is if you have the receipt. Receipts will help you review your budget’s status and to compare charges on your credit/debit card. You may want to ask for a gift receipt for the person you are gifting. It will make it much easier for them to make exchanges or returns.

Remember to keep calm, wear comfortable clothing, and that if you aren’t one to be out in loud, stressful crowds, there is always Cyber Monday.

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

Creating, sticking to a budget will pay off

This was originally published on Monday, December 23, 2013, in the Pacific Daily News.  Click here to subscribe to the PDN.

Question: I want to get my spending under control, but I’m not sure how to go about it. I know that I should have a budget, but I just don’t know how to start.

Answer: You are on the right track. You definitely need a budget. A budget is essential and is a useful way to get a grasp on your spending. It is a simple instrument to help you recognize where your money goes. Most experts recommend that you should save at least 10 percent of your income and put it in some kind of savings account. With a budget, you can reach your financial goals, such as paying down credit cards or saving for retirement.

When it comes to creating a budget, find a way to track your expenses. You do not have to buy a fancy expensive budgeting program.

You can put your expenses into a spread sheet or in a notebook. Another way to keep yourself inline is an app for your smartphone. Some of these apps can even breakdown how you are spending your money. Prices for these apps range from free to a few dollars.

Your budget should include the amount of money you have coming into your household such as pay from work, pension, government benefits, child support and alimony. Then simply subtract all your expenses such as rent, utilities, insurance, groceries and so on. Don’t count on money that you may receive in the future.

Use your budget to categorize how you are spending your money and where you can cut back. Be sure to save a little bit for entertainment and personal expenses.

If you make your budget too tight, you will not be able to stay with it. Look at your budget every quarter and make necessary changes, especially if a major life event happens. If you find that you are in surplus, open a savings account, invest or make a larger contribution to your retirement plan.

If you receive a pay raise, bonus or tax refund, put the money straight into a savings account or pay off debt. If you find that you are breaking even or in a deficit, take action to fix it. Look at what you can cut back on and find ways to help you save such as coupons, carpooling or trimming your utility bills.

Look for unnecessary expenses such as late and ATM fees. Another big expenditure is eating out; it costs less to cook at home and is usually much healthier for you.

Spending beyond your limit is dangerous and can lead to some very stressful situations. Government figures show that many households that make $50,000 or less spend more than they bring in.

Know the difference between wants and needs. A need is something you must have to survive, such as food, shelter and medical care. Needs can be very basic and do not have to cost a lot.

Creating a budget can be tedious at first, but once you get into a routine it becomes less of a hassle, especially once you start seeing results. Budgets are also enlightening once you see just how your money is spent. Now that you have a good idea of where your money is going, start thinking of what financial goals you want to accomplish.

Merry Christmas to all!

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.

To save for vacation, get the family involved

This was originally published on Monday, September 2, 2013, in the Pacific Daily News.  Click here to subscribe to the PDN.

Question: My family and I would love to go on a vacation next year. Do you have any tips that could help us save money for and during our vacation?

Answer: Going on vacation can be very expensive, especially if you are going off island. Like any large purchase, you need to plan and save. We recognize how important it is to take some time off from our hectic lives and relax with our family, but it should not be at the expense of putting us in a financial bind.

Starting early and creating a budget is the best plan. If you can plan well in advance, you can save more money. Give yourself about a year to start saving. Here are a few tips on how to save for a vacation:

• Create a vacation account. Create a special savings account just for vacation purposes. Your vacation account also can be used during your trip as an easy way to track your spending while you are traveling. If possible have an allotment or direct payment come directly from your paycheck to the vacation account. That way, you are not tempted to use that money for anything else. Consider opening the account at a different financial institution from your regular checking account.

• The spare change jar. Sounds old-fashioned, but it works. Did you know that you can save $500 in a year if you dump $1.37 in spare change into your spare change jar every day? If you have two adults adding to the jar or even getting the whole family involved, that total could be much higher. You can even make it a game to see who saves the most spare change at the end of the year.

• Liquidate. In other words, look around your house and sell things that you no longer need. Get rid of the old desktop computer or VHS player that is sitting around the house collecting dust. Place them on eBay or Craigslist. There are even websites that will offer you money for your old cell phones. Have a garage sale. There may be a gold mine of outgrown clothes or toys!

• Get everyone involved. Babysitting, washing cars or cutting lawns for the neighbors or family members is a great way for children to earn some extra money to help toward that vacation goal. Ask grandparents and family members to contribute to the vacation fund instead of a gift for holidays or birthdays. Make a special thank you gift of photos taken from the trip.

• A savings thermometer. This is a great way for all to see your progress and continue to be excited about saving for your vacation. Don’t forget to save a little more for emergencies.

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

Analysis will build a better 2013 budget

The new year is almost here! Over the past few months, we’ve been working toward preparing your finances for 2013. Now we’re at the final step: updating your monthly budget for the year ahead.

Your 2012 Monthly Budget

After the New Year celebrations are over, pull out your monthly budgets from 2012. Over the year, it’s easy to relax on your budget items from month to month, and automatically pay your expenses without giving them much thought.

Your annual review gives you the opportunity to look more closely both your overall financial situation and at each line item. We’ll start with the overview:

Have I been overspending? In your budget at the start of the month, you have projections or estimates of how much you will spend for the month. Your fixed expenses won’t change, but you may overspend or underspend on your more flexible budget categories, such as groceries, entertainment, transportation, etc., by the end of the month.

Now it’s time to review the past twelve months, and figure out if you have a pattern of overspending, meeting your budget, or spending less than you projected.

If you have been overspending consistently, it’s a sign to work on a deeper fix, especially once you add your 2013 goals to your budget. If you have been meeting your budget, check to see that you have a comfortable margin for unexpected events and emergencies that will trigger spending. (You may already have this covered with an emergency fund.) If your budget has been working well for you throughout the year, celebrate! It’s not easy to create a solid budget, and a reward now will help you maintain your good behavior.

Am I happy with my budget? Your budget is a reflection of your financial needs and wants. Take the time to ask yourself if it is an accurate reflection. Have you been spending too much or too little in any of your larger budget categories? Are you happy with the way that your budget is divided between your monthly spending and your larger goals?

The answers to these questions are different for everyone. Take some time to have an in-depth discussion with your spouse or partner, and keep notes.

Once you’ve analyzed your budget from a big-picture perspective, it’s time to look at each line item in turn. Here are some questions that you can use in your analysis:

Do I (or we) need this? This is an important question to ask at least once a year. Take each item, and think about your family or your use of the item over the past year. Does that usage justify the expense? Is that item crucial to your daily life, or can it be cut in favor of a larger goal?

Can I find a more basic or less expensive version of this budget item? Once you have established a need, you may still find opportunities for saving, by asking your service provider for basic options or taking time to comparison shop.

Your 2013 Budget

Your analysis of 2012 will naturally lead into to a revised budget for 2013. Once you’ve covered your expenses, add your 2013 goals, split out into monthly increments. Total your expenses and goals to make sure you are spending less than your monthly income. After you are done, make sure to reward yourself for completing your review, and have a Happy New Year!

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