Pride Month rolls around each June with a festive display of rainbow flags and bedazzled parade floats. It’s a happy, celebratory time for sure, but when the confetti settles and the month comes to a close, life goes back to normal—and for many people in the LGBTQ+ community, that means facing ongoing financial challenges.
A recent survey of LGBTQ+ individuals by the National Endowment for Financial Education highlights some of these struggles:
- 30% of respondents experienced discrimination at banks and other financial services institutions
- 61% live paycheck to paycheck
- 39% feel the quality of their financial life is worse than they expected
- 81% say they wish they were required to complete a semester or year-long course focused on personal finance education during high school
Cultural and structural obstacles can make financial security difficult for LGBTQ+ Americans, according to John Schneider, who runs queer-focused personal finance site Debt Free Guys with his husband David Austin.
John shares with CNBC: “David and I like to say that 80% of personal finance is the same for everybody. A dollar for you is the same as a dollar for me. That’s the finance in personal finance…But the other 20%, which is the personal side of personal finance, is based on our backgrounds, our histories, our socioeconomic status, race, creed, segmentation, all of that.”
According to David, that 20% means that LGBTQ+ Americans will likely have different outcomes than people who don’t identify as part of the queer community.
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In celebration of Pride Month, here are five things LGBTQ+ people can do now to help improve their financial well-being.
1. Work With an LGBTQ+ Knowledgeable Financial Professional
Queer people face unique financial challenges related to legal issues, health care and family planning, and it’s important that they work with a financial professional who understands these hurdles and is able to provide tailored advice and strategies to address them.
There are resources online that can help people find LGBTQ+ knowledgeable financial planners. For example, the CFP Let’s Make a Plan directory allows people to filter for professionals with LGBTQ+ expertise by location.
2. Improve Financial Literacy
Financial literacy is the ability to understand and effectively use financial skills. Reading books and articles, listening to podcasts, and attending finance classes are all ways people can help improve their financial literacy. For LGBTQ+ people, it’s important to consume financial content that addresses their unique issues of concern. Moneygeek’s LGBTQ+ Financial Support and Resources is a great place to start finding content sources.
3. Get Out of Debt & Build Savings
LGBTQ+ people carry $16,000 more in student loan debt than their cisgender/heterosexual peers. They also tend to live in communities that have higher-than-average living costs, and they may also accumulate tens of thousands of dollars of debt from family planning costs.
Paying off debt is hard, but the payoff for LGBTQ+ people is empowering. Without debt, there’s more money each month to save, spend and invest for the future—and getting out of debt can improve one’s standard of living.
Get started by checking out our article, 4 Ways to Reduce Your Credit Card Debt.
4. Prioritize Retirement Planning
When it comes to retirement, LGBTQ+ people as a group have saved less, largely because they tend to earn less income than non-LGBTQ+ people. However, it’s important to remember that a person doesn’t need to be rich to save for retirement—and it’s never too late to improve one’s financial outlook. Late-stage retirement catch-up tactics can help people build a nest egg as rapidly as possible.
5. Consider Life Insurance
LGBTQ+ consumers have a lower rate of life insurance ownership than all Americans—38% versus 50%. Many don’t buy life insurance because of competing financial priorities, but getting coverage is important for helping to protect one’s family from final expenses, leaving a financial legacy and creating generational wealth. With policies available starting at less than $10 a month, purchasing life insurance is something to consider.
Check out our blog, What Is Cash Value Life Insurance?
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