10 Financial Tools for Your Gay New Year

Plan Your Spending

Budgeting is not a difficult task; it's a primary step to financial freedom. You only need a simple plan, a sheet of paper will do. When you plan your expenses they take on real cost; planning helps identify expenses that are not actually necessary. Simply list them all. If you are paid weekly plan your budget weekly, or budget on your pay schedule.

Prefund Your Spending

When you are ready to actually pay the bill, the money is already in the pre-funded account. Set up a separate checking account at your bank for each of your prefund accounts; each payday deposit into your home account to cover rent, electricity and telephone, into your food and entertainment account, and into your auto account to cover the car payment, gas, insurance and repairs. Use a bank that has free accounts, or free if you keep a minimum balance or receive direct deposits.

Break The Starbucks Habit

Go to a major retailer and buy a bag of coffee. When you get home brew some coffee, perhaps add in some sugar and a drop of fresh cream. If you want to travel with your coffee pour it into any traveling drink container and take it with you. The cost is probably pennies, not to mention the time to stop and the parking ticket.

Create A Savings Habit

Paying yourself first is easy. Simply designate a small amount of money to begin saving, try five dollars each paycheck. Anyone can find five dollars a week in their spending to divert to saving; skip one beer at the gay bar. The object is to create a habit. You only need to save the same amount twenty-one times and you will be on your way. Once your saving habit is established you can rapidly add to the initial amount and include any raises and unexpected income that comes your way.

Start Your Retirement Plan

The power of time is such that someone right out of college or beginning their first real job can effectively retire on lunch money. Retiring on lunch money means you pack a healthy lunch each day, save the $10-$15 a day or about $300 each month, earn a return of 5 percent and in 45 years you will have over $600,000; just from lunch money. At fifty, with fifteen years to retirement you will have to save $2,300 per month to achieve the same $600,000. Missing out on the gay gossip over burgers is worth $600,000 right?

Check Out Fees In Your Employer Sponsored Retirement Plan

Over the course of your forty-year career, you can pay tens of thousands of dollars in fees and reduced earnings while these fees are difficult to identify. Just because you're not writing a check for your 401K fees does not mean they don't exist. 401K plan providers do all they can to mask the true cost of your retirement plan and it is important for you to keep more of your savings working for you, not the plan manager.

Review Your Withholding

Your Federal Withholding is calculated based on the number of exemptions and any extra withholding you request on the W-4 form you submit to your employer. In addition there are deductions for Social Security at 6.2 percent and Medicare at 1.45 percent of your income, which for many people can outstrip the Federal Income Tax withholding.

Discuss Your Pay Rate

Surveys report that gays earn more, save more, owe less and have more equity in their homes than the average American; we are more likely to have a job than the general population which likely makes a major contribution to all of the above. A new year is a natural time to review your pay with your employer.

Check Your Health Insurance Options

With the new health insurance exchange you may qualify for a subsidy to cover some or most of your premium. There is no cost to log on and find out. With a subsidy you may find that your out of pocket cost is less than your employer sponsored insurance. You can not be denied coverage on the exchange for preexisting conditions including HIV.

Look Into a MVNO

Opting for mobile phone service through a Mobile Virtual Network Operator, or MVNO, such as SimpleMobile can save a great deal without a noticeable change in service. MVNOs don't operate their own networks but contract with other carriers. SimpleMobile works on the T-Mobile network and starts at $40 for unlimited voice, text and data at up to 3G without a contract.

Ric Reily is the author of two books, "Money Is The Root Of All - Skip The Debt Habit," and "Gregory's Hero." His firm CFO On Call provides small business finance and operations consulting. Ric is married to John, his partner of 26 years, and lives in South Florida with their Havanese dog, Buckley. You can reach Ric at [email protected]