Ka Wai Ola - Office of Hawaiian Affairs, Volume 38, Number 3, 1 March 2021 — Live Within Your Means [ARTICLE+ILLUSTRATION]

Live Within Your Means

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By Timmy Wailehua

One of the most difficult duties of managing your finances is "living within your means" or simply put, budgeting. Many individuals budget, or think they are budgeting, but in reality, they are stretching their ineome as far as they ean. Metaphorically speaking, you are casting a 6-foot throw net into the oeean trying to catch an entire school of 50-60 mullet, but only able to eapture 10. There is no way to catch more mullet, as the throw net is at max capability. Budgeting is spending less than your amount of received ineome. With technology, in today's age, there are many hnaneial institution websites and mobile applications that ean assist you with tracking your expenses for budgeting. The old fashioned way of manually writing down your expenses on a spread sheet works just as well. The key is to track and record your monthly fixed expenses and debt. This will give you a better perspective of your daily balance of available net ineome when eompared to your total expenses. Many individuals do this visually by taking mental notes in their head or constantly checking available funds in their account. This is difficult to do if you are a busy individual with daily tasks and operating your own business. Checkbook balance sheets are becoming obsolete as the new age of debit cards and phone technology make it easy to purchase items

at your fingertips. The use of a smart phone application ean be as easy as sending a text. All things considered, knowing exactly what you have available in your bank account will definitely help you prioritize your savings and spending. This will also give you an opportunity to budget your lifestyle and plan for the future. This doesn't mean you'll lose out on all the fun activities like vacations and pau hana entertainment, but it will assist with knowing your limits and being one step ahead. Budgeting is a lot easier said than done, but I find that these weekly practices ean help manage your finances. Setting up automatic payments, splitting paychecks into separate accounts, calculating total household ineome and expenses, sitting down with the entire household to go over monthly finances, monitoring the due dates of all expenses, choosing appropriate monthly payment due dates to spread out money availability, cutting down on wants and focusing on needs, building an emergency fund, using a smart phone application for budgeting, and taking advantage of online budgeting platforms offered by your bank are great ways to help you "live within your means." ■ Timmy Wailehua is the first vice president of the Native Hawaiian Chamber of Commerce and is currently a mortgage insurance underwriter at Essent Guaranty, a private mortgage insurance eompany. He has been in the financial industry since 2001, and has served as Central Pacific Bank's AVP of Home Equity Lines of Credit Operations manager, OHA loan fund manager and First Hawaiian Bank's VP ofMortgage Loan Operationsfor the Residential Real Estate Division.