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

Be proactive in protecting your identity, learn how to spot fraud

This was originally published on Monday, April 18 ,2016 in the Pacific Daily News.  Click here to subscribe to the PDN.

Q: I recently received a letter in the mail from my employer stating that my personal information may have been compromised.

They tried to ease my anxiety by informing me that they will be monitoring my information for the next five years looking for any signs of identity theft.

I want to be more proactive but do not know where to start.

Could you offer some advice?

A: Identity theft is one of the fastest growing crimes worldwide. Technology has moved us into a whole new world when it comes to finances, socializing and shopping.

We place so much personal information online that we are very susceptible to having our identity stolen.

The United States Department of Justice defines identity theft and identity fraud as “types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.”

Identity theft can cause a lot of stress and lost hours trying to correct it, not to mention a strain on your job and credit.

There are several types of identity theft.

  • Financial identity theft. This theft is the most familiar and most heard of. Financial accounts are compromised and money is taken from accounts and unauthorized purchases are made on credit cards.
  • Tax-related identity theft. This type of theft occurs when a Social Security number is used to get a job or for tax purposes or when a Social Security number is used to file for a tax return in another state.
  • Medical identity theft. This occurs when health insurance numbers or policies are used to receive medical attention, prescription drugs or to file a claim with an insurance provider.
  • Child identity theft. A minor’s Social Security number is misused to open bank accounts or credit cards, or to apply for a loan, utilities, or government benefits.
  • Criminal identity theft. A crime is committed using another person’s name.

Many people do not know that their identity has been stolen until it is too late and the damage is quite extensive. There are several red flags that one can spot that could indicate that you are a victim of identity theft. Some include the following:

  • Credit score. Your report shows inaccurate personal information or unfamiliar accounts and/or your credit score is lower than you think it should be. Take a closer look at what is bringing your score down. If you see unusual activity, start repairing it right away. Contact the company or companies that are reporting to the credit agencies.
  • Mail. Not receiving your mail, especially your utility bills and bank statements, or receiving mail from banks or services from which you did not apply are both signs that you may have had your identity stolen.
  • Unauthorized purchase/debt. You are receiving phone calls from debt collectors regarding debts that are not yours or unauthorized purchases on your debit/credit cards. Medical providers are sending you bills for services you did not receive.
  • Loan application. You apply for a loan or credit card and receive a very high interest rate offer or you are denied.
  • Tax return. The IRS has called to inform you that you filed more than one tax return in a year or you failed to file in a particular year.

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.

Deductions to consider when filing your taxes

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

Last week’s Money Matters listed a few possible deductions or payments that you should consider when filing your taxes. Here are more to think about.

Medical or dental bills

Did you have medical issues that required frequent visits to the doctor or dentist? You may be able to deduct some of the expenses from your tax return. To do so, you will have to itemize your deductions. If you are claiming any medical expenses, you cannot file short form 1040A or 1040EZ. According to the Internal Revenue Service, take the following into consideration when filing a claim for any of your medical expenses:

• Add up your medical and dental expenses for yourself, spouse or dependents during 2013, you must use the date you paid the amount, not the date the medical service was received. Include co-payments and unreimbursed amounts for prescriptions, doctor visits and procedures. Some insurance premiums, medical supplies, medical-related mileage and transportation costs also may apply.

• If your total expenses are more than 7.5 percent of your adjusted gross income, you can deduct the portion of your expenses that exceed 7.5 percent. Example — if your income is $50,000, you can claim your medical expenses that are more than $3,750.

• You must have all your receipts for the services you are claiming.

To learn more about if you can claim your medical or dental expenses, visit the IRS website at www.irs.gov and download Publication 502.

Medicare

If you are on Medicare, you may qualify for the new 2013 Medicare tax rate of 0.9 percent if you work and make a certain amount during the year. This will be in addition to the regular Medicare tax you are already paying. These are a few things the IRS lists to consider if this new tax applies to you:

• If you are a single taxpayer, the tax applies if you make over $200,000 a year;

• If you are married and filing jointly, and your combined income is more than $250,000; or

• If you are married and filing separately and your total income is over $125,000, you may have to make additional payments.

To report your Social Security taxes, use Form 8959. Some of these payments may be costly, so ask your employer to withhold more taxes on your paycheck or make estimated quarterly payments to the IRS. To find out more if you qualify, go to the IRS website. You may also use their Withholding Calculator.

Military or reservist

There are dozens of tax provisions for military members and their families. Here are just few from the IRS:

• Filing for tax returns: Extensions are available for military members who are on duty outside of the United States on the day of the tax return.

• Tax deductions:

• Active duty out-of-pocket moving expenses if the move was because of a permanent change of duty station (PCS); and

• Un-reimbursed uniform costs can qualify as a tax deduction if military regulations don’t allow you to wear your uniform off duty.

Publication 3, the Armed Forces Tax Guide, is available on the IRS website to review if you meet the requirements for these or other tax provisions.

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.