Landing in West Hollywood in my early twenties was like a dream come true: hot guys, tons of fun parties, and no parents. Sure, I was in college getting good grades, but come evenings and weekends my life felt limitless.
When I graduated, I faced student loan payments, incredible credit card debt, and an assistant's entry-level salary that barely paid for rent and food. Nevertheless, I still needed the latest jeans and shirts, as well as cash for cocktails, dinners out, and any potential dates. (And, trust me, there were plenty of them.)
Then one day I sat down to pay my bills and realized I couldn't. I didn't have the money. And I didn't know what to do.
As stereotypes go, gays are supposed to be financially better off than their straight counterparts. Last year a Prudential survey of 1000 LGBT respondents indicated that gay people had significantly higher annual incomes -- $61,500 compared with the national median of $50,054 -- compared to heterosexuals. CNN reported, "They also carried about $4,000 less in debt than the average American and had $6,000 more in household savings."
Perhaps it's the lesbians embracing their inner Suze Orman who make up those stats, because I sure as hell wasn't in that group. But I also wasn't alone.
A 2008 Harris Interactive poll showed more than half of gay men surveyed (53%) like to keep up with the latest styles and trends, compared to fewer than one-third (30%) of heterosexual men. Likewise, nearly half (49%) reported that they tend to upgrade to the latest model or version of a product, compared to 35 percent of heterosexual men.
Clearly, there's a need for gay men to keep up appearances, but that can hurt us long term. It adds stress that can lead to excesses like drinking and smoking, and puts a burden on building relationships and solid futures.
However, if you're looking to get onto financial solid ground, here are five common mistakes you may want to avoid:
- Paying only the minimum payment on your debt. This will result in the amount you owe actually growing, and your problems becoming worse.
- Relying on friends and family. This can damage relationships with the most important people in your life.
- Using unscrupulous credit counselors. They often demand cash or high fees for the help they promise, but don't deliver.
- Using new high-interest loans to pay off lower interest rate loans. It may be easier to just have one payment, but it will actually increase the amount you have to pay back.
- Declaring bankruptcy. This can have permanent and severe consequences on your financial future. Avoid it if you can, especially when debt settlement may work for you.
Four Financial Fixes - According to the website First to Know.
1. Fix Yourself
It may sound cliché, but the first big change comes from within. I didn't need to always have the latest and greatest product. Who was I trying to impress? Real friends and a long-term boyfriend would love me for me—not the cocktails I bought them or the watch I wore. Once I fixed that mentality, I was on my way.
2. Zero Interest Credit Card
Getting more plastic may sound strange, but a zero interest credit card lets you transfer over the balances from your higher interest cards. Just set yourself with a monthly plan to pay off the total before that interest-free period expires.
3. Get Budgeting Help
Some of us just can't figure out where our money is coming or going. Online companies like LearnVest offer simple, easy-to-use tools that let you understand your money and make smart decisions to cut back and save. Right now they're even offering new users a free financial checkup.
4. Debt Settlement
Debt settlement is the process of negotiating with creditors so they forgive a big portion of your unsecured debt. Unsecured debt includes credit cards, some forms of student loans and most medical bills, but does not include mortgages or auto loans, student debt and taxes.
Why would a credit card company settle debt for less than what you owe? Because when you are represented by a reputable debt settlement company the creditors know for certain that they will be able to recover some of the money owed to them, rather than recovering little or nothing if you are forced into bankruptcy.
Debt settlement companies work with individual consumers to determine a reasonable monthly amount that they can afford to save in anticipation of paying off their debt. Debt settlement clients save an affordable amount every month, setting it aside in a special-purpose account and, as these funds accumulate, the settlement company negotiates a final settlement amount for each debt.
Typically, debt settlement companies negotiate on behalf of thousands of people every day, and the savings they obtain for consumers can be significant.
Debt settlement agencies like Freedom Debt Relief offer a free, no-obligation consultation that will help you evaluate your options. Then, if you chose to proceed, they will develop a plan that meets your specific needs and start negotiating on your behalf with your credit card companies.
Keeping up with the other boys in town seems to be a gay rite of passage. But there comes a time when you need to step out of that world and start building a financial future for yourself. Because, as stereotypes go, being financially sound is one we can all happily embrace.