Savvy saving

Mike O’Toole knows what it means to live on a tight budget. When he first moved here from Newfoundland in June 2001 he didn’t have much money to live on. He had just graduated from Memorial University and was loaded down with a student loan. He quickly had to figure out how to balance his money.

“I started a budget when I moved,” O’Toole recalls. “I learned from necessity. I didn’t have a job and I didn’t have rent for the next month.”

That meant adhering to a strict spending budget of five dollars a day-and just $10 a week for groceries.

Times have since changed for O’Toole, at least somewhat. These days, he is able to save some money from each coffee-shop paycheck, and has even accumulated some savings to fall back on.

“I’ve always tried to live not beyond my means,” says O’Toole, who works at a popular coffee shop on Davie St. “I’m really, really careful about decisions I make around money.”

It’s not always easy, he notes, but he chooses to be careful in order to save.

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“We all have the same challenges of setting aside money,” says Shelly Galloway, assistant manager at CCEC Credit Union.

She shares a couple of tips for saving money. Her biggest tip: be sure to find a financial planner you’re comfortable dealing with. Once you have accumulated some savings and you’re ready to invest or purchase housing, you’ll need to feel comfortable with the person advising you, she says.

“In the queer community in the past, we haven’t been as open to divulging personal information, so it’s harder to do proper financial planning,” she explains.

Once you find a financial advisor you can trust, ask them to help you set up an automatic transfer, Galloway continues. That way, every payday, a portion of your money will go directly into your savings account.

Bryan Common, an account manager at VanCity Credit Union’s West End branch, has some savings tips of his own.

His number one tip is to “pay yourself first.”

It’s an idea similar to Galloway’s. The moment your paycheck hits your account, have your bank put aside a fixed amount or certain percentage in a savings account, he says. A trick is to make it an account that you can’t easily access and pillage.

Granted, it can be a struggle to save a lot while working a minimum wage job, but even $20 put aside each paycheck adds up.

One big concern in Vancouver is rent.

“The common problem in Vancouver is spending too much on your residence, underestimating what it will cost to rent or mortgage,” Common says. “It might be the exuberance of moving to the big city.”

Fresh, young gay people will move to Vancouver from, say, the Prairies and pay double the rent and not adjust their finances accordingly, he explains. “Low income people can live in Vancouver but it requires clever financial living choices such as co-op living and good credit.”

Another challenge facing some gays and lesbians stems from the coming out process, Common suggests. Some gays and lesbians strive to recapture their lost youth when they come out-and often spend accordingly, he explains. But now these people are on their own dime and have to pay rent and other not-so-teenage expenses. Not to mention how expensive it can be to sneak around-using cabs, a cell phone-if someone is not yet out, he adds.

“Not wanting to rain on someone’s coming out parade, but protect your credit rating,” he advises. “And have a very rational understanding of your expenses. In the gay and lesbian communities, savings are often sacrificed for financing too rich of a lifestyle.”

Learn to make your own lattes, he suggests, highlighting one way to curb the flow of disappearing money.

“I have helped people discover where their missing $200 is and have found it at Starbucks,” he says. “But this is just an anecdote for how you spend small amounts of money without realizing where it goes.”

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A big part of financial planning is being able to dream of things to do with the money you’re trying to save.

“In an ideal world the student loan would be gone,” O’Toole says. “I would like to sometime in the future buy a house, but that’s a lofty goal,” he adds.

Common says that saving is really about having economic independence. It’s about being able to make decisions in your life based on you, not on your level of cash.

Having money in the bank gives you the option to leave a bad job, end a relationship or pursue a dream.

“It lets your choices be about you, not what you can afford,” Common says. “A dollar in your pocket-its value to your peace of mind cannot be calculated.”

While savings can go towards many things, such as travel or tuition, credit unions such as VanCity and CCEC also have some practical suggestions for long-term investments.

Everyone struggles to save for their future and their retirement, and investing is a practical way to do that, says Galloway.

Common investment options range from guaranteed investments funds (where you’ll make a little interest without risking your capital), to various domestic and foreign stocks and bonds (with varying degrees of risk and potential gain).

Once people are confident they won’t need all their savings for emergency funds, they could consider investing some of it, Galloway says.

And, of course, you could always buy a house and put your extra savings into property.

“For singles, it’s wonderful to get into the [housing] market because you’re getting equity from owning your own home,” Galloway points out. “Renting is fine for people who are not settled in a city,” she says. But buying a home can be a really good investment.