While not only a problem for gay people, consumerism is sometimes out of control and stunting our futures. Los Angeles Certified Financial Planner David Rae has some advice on the fight to become more financially savvy gays. Remember Gay Money Matters make the most of your gay financial planning opportunities.
By David Rae Certified Financial Planner™, Accredited Investment Fiduciary™
If you would rather look rich than actually become wealthy, then stop reading NOW. If on the other hand you actually want to reach your financial goals, whatever they may be, I’ve learned a few financial tips that will help you along the way to become more financially savvy. I also hope to help your find more financial happiness. Gay financial planning is a must, and having a fabulous gay financial planner can help the process more fun.
I know for many of us it’s a fight to be financially savvy gays. We are surrounded by temptation that attempts to separate us from our money. And so maybe it’s appropriate that a quote from Fight Club sums up much of what I’m about to say:
“We buy things we don’t need, with money we don’t have, to impress people we don’t like.”
Financially Savvy Gays SPEND LESS THAN THEY MAKE:
Seems pretty obvious, but don’t we all have at least one gay friend with a busy social life, heavy travel schedule, and often thousands of dollars in credit card debt? Carrying balances on credit cards is a great way to kill your chances of creating wealth. It’s not how much you make, but how much you keep that drives wealth accumulation. Also, with no emergency fund, small balances on credit cards can quickly spiral out of control. You will be able to continue to spend a bigger portion of your income if you eliminate credit card interest.
DON’T COMPARE YOURSELF TO OTHERS if you want to be a financially savvy gay:
Only do what makes sense for you. Whether you are flying coach or first-class, the plane takes off and lands at the same time. What’s important is that you have money in your pocket at whatever fabulous locale you’ve chosen to visit. We all suffer from some status envy, but often those status symbols are like mirages. They’re not real. How many of the “Real Housewives” have had their cars or even houses repossessed? Nothing to envy about that.
BARGAIN IS NOT A FOUR-LETTER WORD to a financially savvy gay:
Like a lot of gay people, I love to travel, but I also love to get a good deal. I often shop around for major purchases. Last year a few friends headed out for a trip. I bought my flight in advance and got a pretty good deal. My travel companion procrastinated and found himself stuck in the middle seat for almost double what I paid. The plane went to the same place, no added value for the extra expense. A dollar saved is better than a dollar earned (and no taxes are due on the savings). To think of it another way, the more you save in one area like flights, mean more money has to spend on fun things like dinner with friends.
Related: LGBTQ Wealth Management and how to Avoid the Gay Marriage Tax Penalty
NEED AND WANT ARE NOT THE SAME THING for financially savvy gays:
It really amazes me how often people confuse these two things. For example: “I want the new iPhone 27.” Versus, “My cell phone died, I need a new one.” That same friend with the credit card debt is probably making impulse purchases. MAKE SAVING AUTOMATIC: Set up an automatic deposit into a savings account, retirement account, or even a mutual fund. Make it automatic and treat it like it’s a bill.
You may be surprised how you don’t miss the money, and how quickly it adds up. You can even use this for short-term goals like a vacation. Or perhaps you are dreaming of a second home in Palm Springs? Think of how much more fun you could have to know your Atlantis Cruise or Provincetown stay is paid for in advance. With it paid off, you can start planning your next Gaycation without having to dig out of the debt from the last trip.
These are just a few basic steps you can take right now to get you moving in the right direction financially. Working with a gay financial planner to map out your financial goals will help you get on track to achieving those goals. Whether you are about to retire, or just entering the workforce, the best advice I can give you now is to get your head out of the sand, pay yourself first and start accumulating wealth now. Being financially savvy gay may be more challenging for some than others, but no one’s ever said I wish I had less money saved up.
Gay Money Matters, Follow this Blog for more tips to Make Fiscally Fabulous Life Choices via Gay Financial Planning.
DAVID RAE, CFP® is a retirement planning specialist with DRM Wealth Management, specializing in the needs of the LGBT community. Follow him on Twitter @davidraecfp or via his website, www.davidraefp.com.
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