LGBTQ+ people—especially LGBTQ+ people of color—often faced outsized financial challenges that make it more difficult to both save money and fund their basic needs. These hurdles can be more than stressful, but there are fortunately several actions LGBTQ+ people can take to lessen the burden.
Common financial challenges for LGBTQ+ people
From healthcare to housing to having children, there are unfortunately many ways in which being LGBTQ+ can more easily drain your bank account.
Healthcare
LGBTQ+ people, and transgender people in particular, often face exorbitant healthcare costs as compared to non-LGBTQ+ people. Many insurance plans still do not cover gender-affirming treatments, which can cost hundreds of thousands of dollars.
Additionally, LGBTQ+ people often face discrimination by their doctors. As such, it is more common in this community to avoid visiting a health care professional unless absolutely necessary. This avoidance, however, can ultimately lead to higher healthcare costs when conditions worsen while left untreated.
Family building
LGBTQ+ people who want to have children generally utilize options like IVF, IUI, surrogacy and adoption. All of these can cost thousands and thousands of dollars per child.
Lack of financial management knowledge
LGBTQ+ people who have been rejected by their families may not have anyone in their lives to provide financial guidance and thus may not be as knowledgeable on how to save.
A 2018 survey from Experian found that 44% of LGBTQ+ respondents said they struggle to save money, compared to 38% of the general population. LGBTQ+ ages 25-34 were especially worried about their spending habits.
LGBTQ+ young people are also less likely to have financial support from parents. For example, LGBTQ+ students take on an average of $16,000 more in student loan debt than their non-LGBTQ peers, according to Mint.
Housing
Whether renting or buying, LGBTQ+ people can be subject to discriminatory housing practices that leave them vulnerable to predatory lending and a higher cost of living.
Tips to tackle these challenges
While there is no quick fix to these obstacles, there are certainly measures you can take to mitigate them.
Work with an LGBTQ-Inclusive financial planner
A financial planner who specializes in or has experience working with the LGBTQ+ community can be a huge help in getting your finances under control. An LGBTQ+ planning expert will know about the unique challenges this community faces and can help you find the best way to save based on your specific life circumstances.
It is also important to note that you do not have to be rich to use a financial planner. Look for someone who offers services with no minimum starting point.
If you’re part of an LGBTQ+ couple, working with an inclusive estate planning attorney can also be helpful to ensure all of your legal documents are in order. Despite marriage equality, it remains crucial for LGBTQ+ couples to have their wills, power of attorney, etc… firmly in place, as their relationships are more often questioned.
Make sure your bank is LGBTQ+ friendly before taking out a loan
Do your research on any institution from which you are considering a loan. Do they have a history of working with LGBTQ+ people? What do they do to support their LGBTQ+ clients? Is there anyone you know who has worked with them that can vouge for fair practices?
Additionally, watch out for shady behavior like extremely high fees and interest rates, balloon payments, and lenders who try to rush you into signing something.
Invest in your financial education and start saving now
Investing in your financial education does not have to be costly. There are so many great (and free) financial resources online. The Debt Free Guys, for example, was established specifically to help the LGBTQ+ community. Commit to reading at least a few articles per week to expand your knowledge on how best to save—just make sure the websites you’re using are reputable.
If you want to take your learning to the next level, consider signing up for a financial literacy course.
You can also utilize a budget tracker to help you stay on top of your spending. Services like Mint are a great way to stay aware of where your money is going each month and can help you identify spending patterns you may not be aware of.
Where to begin
Taking control of your finances may seem daunting, but if you divide your goals into smaller tasks and take it one step at a time, you’ll be well on your way to becoming a savings expert.
Start by committing to make yourself more aware of your finances by tracking what you spend. From there, you can identify a few areas where you can cut costs. After that, start reading about some of the best ways to save. Keep thinking in smaller steps to feel less overwhelmed.
