Change your Mind about Money If you’re thinking articles about saving and investing have nothing to do with you, then this article is for you by Todd Rainey, author of Money Talk, A Gay and Lesbian’s Guide to Financial Success

If you’re like most people, you have a nagging thought in the back of your mind that says "someday I’m going to start saving for the future" (that nebulous place way out there in the ether). The problem is, we see it as something we have to do forever, which makes it seem too hard, so we never quite get around to it. I believe, however, that with a plan, we can do anything, one day at a time.

As a chartered financial consultantfor the last 15 years, I’ve developed the tools and expertise to help people shift their thinking about money and realize more than a fleeting fruition of their life’s labors. You can stop living from paycheck to paycheck and experience the freedom of knowing you have more than enough to live comfortably for a long time.

The challenge for gays

We all love the good life. We deserve a night on the town, nice clothes, a snazzy car, and a cool place to live. As gay men and women, we have a special corner on the market on splurging. But for some, an attitude of instant gratification can stand a slight tweaking. What if we could be smart about money–and keep our joie de vivre?

Many of us are independent thinkers who become wildly successful entrepreneurs. We don’t expect much support from the world, so we’re quick on our feet and easily adapt to whatever comes along, constantly monitoring our environment. Career-wise, by the time we reach our 30s, we can usually make a good living. As contrary as it seems, becoming successful can mark the beginning of a financial downfall. Did you know that only 5 percent of the U.S. population retires with a comfortable income? Maybe you’re not worried about that now, but Jill* is.

Jill’s story

Ten years ago, Jill secured the job of a lifetime. Her salary doubled overnight and increased at the rate of 5 to 8 percent each year thereafter. After years of shopping discount stores, driving a clunker, and living with roommates, she moved into an oceanfront apartment, bought all the clothes she could stuff into a walk-in closet, acquired a fancy new car, and generally lived as if there was no tomorrow. But tomorrow came eight years later when she was laid off. "Not only did I have a mountain of credit-card debt," said Jill, "but I had nothing saved. The reality of my poor money habits sent me into despair–and bankruptcy."

What is your relationship with money?

Jill’s story is not unusual. Her childhood role models were not the best. She told me that her alcoholic father was a compulsive spender who bought friendships with his bankroll. When he inherited a million dollars in 1950, he quit working and spent it all in only three years, ending up in prison for "bad checks." Jill’s mother was a bitter woman with a victim mentality, who spent the rest of her life finding other men to pay her way.

When she came to me, Jill was getting back on her feet income-wise with her own business plus a "day job." Although she’d curbed her self-described "emotional spending" ways, she needed a plan–fast. At age 50, she wanted to know how to save for retirement. Using some of the tips described below, she has started on the road to a more secure future.

When it comes to managing money, it’s not the past that’s important. Whatever you learned in your life before now can be unlearned and your relationship with money can be changed for the better–just by changing your thoughts and backing it up with new habits.

We’re different

There are many differences in how gays spend and save money. Most of us don’t have spouses to support or children to raise–meaning we usually don’t have expensive weddings or ruinous divorces to worry about either. We can therefore create more disposable income, which is the money left over after paying for our food, clothing, and shelter. It’s the money we use to make choices, like buying a car, going on vacation, or purchasing a big-screen TV.

The trick is to use disposable income in a way that converts today’s dollars into tomorrow’s wealth. Whether you’re saving for a vacation or for old age, you have a wonderful opportunity to achieve and appreciate a high quality of life. My own story is an example.

How I learned about money

I grew up with a dual perspective about money. My grandparents were children of the Depression–a time of struggle and lack. As adults, they over-compensated by saving and never using credit, except for their house and building the family grocery store, both of which loans were paid off years ahead of schedule. With their children, however, they took the opposite position. Whatever my father needed, my grandparents covered. He never learned how to plan, save, or invest. With parents that always rescued him, he never understood the value of money. He always figured the family fortune would eventually remedy all his money problems. Sadly, he died deep in debt at age 62 last year–a few months short of receiving his inheritance.

It starts with a consciousness of wealth

Somehow I evolved from this by deciding that money is a tool, and not an end unto its own. According to Eric Butterworth in his 1993 book Spiritual Economics, "The word ‘affluence’ is an overworked word in our time, usually implying cars and houses and baubles of all kinds. Its literal meaning is ‘an abundant flow,’ and not ‘things’ at all. When we are consciously centered in the universal flow, we experience inner direction and the unfoldment of creative activity. Things come too, but prosperity is not just having things. It is the consciousness that attracts things."

Despite the mixed messages I had as a child, with a little hard work and my growing belief in a universal inheritance, I’ve been able to create a successful financial planning business and, at the same time, help others to benefit from my experience.

Follow it up with a goal and a plan

While you’re deepening your prosperity consciousness, however, don’t wait to get started with some practical, money-management steps. All you need is a goal and a plan–plus a little discipline and foresight to keep on track and follow it. That’s the hard part. But I’m going to make it easy by starting with a simple, obtainable goal. It’s not about giving things up, but how you can save money to realize long-term goals–and have more fun in the process. Slight changes in your lifestyle will hardly slow you down. Here are some ways to cut corners as your consciousness of wealth takes hold:

Begin having a long-term relationship with your money. Many people have what I call a one-night stand mentality–easy come, easy go. When you begin to save and watch your money grow, even in small amounts, over time it becomes infectious and your excitement will inspire you to save even more.

By just saving $5.50 per day you can easily save the first $2,000 at the end of the year to contribute to an IRA. Contributing to an IRA at $2,000 per year over 30 years, means you will reap $400,000 at a modest 10 percent annual growth rate!

Can you handle saving $15 a day (see below)? That’s $460 every month that you can invest at an annual growth of 10 percent. After 30 years you will have one million dollars!

Start by simply not buying something new to wear for a date. Here are some of the ways to cut back and save a fortune:

Activity...............................................................................Monthly.............Annual

1 club night per month.....................................................$50.......................$600

1 brown bag/week vs. eating out....................................$40.......................$480

1 cafe latte twice a week..................................................$30.......................$360

Skip 1 dinner/movie once a month................................$75.......................$900

Wash car at home vs. car wash......................................$48.......................$576

Use grocery coupons (approx. 14 percent savings)...$60.......................$720

Cancel seldom-used gym membership..........................$24.......................$288

Raise auto insurance deductible.....................................$50.......................$600

Magazine subscriptions you don't read........................$10.......................$120

Save $670 on tax by contributing to IRA....................$55.......................$660

Take-out vs. dining out once a month..........................$45.......................$540

TOTALS...........................................................................$487.....................$5844

Some tips to capitalize on your savings

• Keep your car for an additional two years after you have paid off the loan. This will save an average of $300 per month for 24 months for a total of $7,200 in savings. Be sure to actually continue to write the check and deposit it directly into your savings or investment accounts.

• The average mortgage is a 30-year term. You can save almost as much in interest as you paid for the home initially by paying off your mortgage over 15 or 20 years. For example, a $150,000 loan at 7 percent interest saves $80,156 in interest by paying off the mortgage in 20 rather than 30 years. Or save $116,580 in interest by paying off the mortgage in 15 years rather than 30.

• It may be easier than you think to pay off your mortgage 15 years earlier. The difference in monthly payments between the 15- and 30-year schedule is only $351 per month. As you can see, it would be easy to add even a small amount to your monthly mortgage payment and save hundreds of thousands of dollars over a relatively short period of time.

Think about the quality of life you will enjoy during your retirement, perhaps even take an early retirement, by making some of these minor adjustments today. Honestly, you’ll hardly notice the changes, but I promise it will be worth it later. Just think about these facts:

• The average retiree will live 25 years in retirement.

• Only 4 percent of Americans retire on a $40,000 annual income.

• 44 percent of Americans have an average monthly retirement income of $1,200 including Social Security.

• 4-percent inflation will erode the value of the dollar by 50 percent in only 18 years.

• Money invested at 10 percent will double every 7.2 years.

Just do it

Jason* came to me about two years ago, not having a clue about saving or investing. A successful travel agent in his mid-30s, he was thinking about saving for retirement since his mother was preparing to retire with virtually no savings. All Jason knew was he didn’t want that to happen to him.

At our initial meeting, Jason thought he was starting too late and had too little to invest to make a difference. I explained that investing regularly over a period of time will grow substantially. Since he had never invested before and had virtually no savings, I suggested a Money Market Mutual Fund so he could accumulate up to three to six months of his current income into a liquid and safe vehicle before testing the waters with a more aggressive, long-term investment.

Jason began with an initial amount of $250 and set up an automatic monthly debit of $150 from his checking account directly into the Money Market Fund, which was affordable and did not impact his lifestyle.

Today, two years later, Jason has continued his regular monthly investment program and has accumulated nearly $10,000 in his Money Market Fund. He’s about to embark on his first test in the investment world with a systematic investment into a family of equity-based mutual funds.

The key has been Jason’s relationship with money. He gave it a chance to grow and, like the seed of romance, it blossomed–all because he started slow and stayed within his means. By investing in a safe Money Market account, which is not subject to the ups and downs of market fluctuations, he became comfortable with the process; i.e., he had the psychological edge he needed to become a successful investor.

Like Jason, you can realize the abundant life you are destined to live. Believe it, take action, and it can happen for you, too.

*The names of clients have been changed to protect their privacy.

Author of Money Talk, A Gay and Lesbian Guide for Financial Success, Todd Rainey is president of World Class Financial (www.worldclassfin.com) in Sherman Oaks, California. A financial service professional since 1986, Todd is a "Top of the Table" member of the Million Dollar Round Table (MDRT), which constitutes the top 1 percent worldwide of financial services industry professionals.