The financial issues that people of the LGBTQ+ community face

The LGBTQ+ community has achieved considerable headway in achieving constitutional and civil liberties during the previous decade. The Movement Advancement Project (MAP) released an analysis in 2020 that evaluated the situation of LGBTQ+ persons in each state and showed substantial progress in several areas.

Initially, five states prohibited discriminatory practices in health care based on sexual preference and gender individuality in 2010, but by 2020, that number had climbed to thirteen. Although 33 states considered updating gender identification on driver's licenses incredibly hard in 2010, just nine states still have these strict standards.

Nevertheless, much improvement is required to attain complete equality, particularly in legislative and economic areas. According to a 2018 Experian report, 62 percent of LGBTQ individuals indicated they suffered financial difficulties due to their sexual preference or gender status. Housing discrimination, salary discrimination, and a lack of job growth were among the difficulties they encountered. It is vital to recognize these challenges, whether legislative discrepancies make LGBTQ+ people financially disadvantaged or personal economic issues. Identifying the issues will aid in drawing awareness to them and developing solutions.

Here are some of the financial issues and obstacles that LGBTQ+ persons encounter and the resources they need to achieve a secure financial future.

Workplace discrimination and pay gap issues

As per research by Out & Equal, almost 10% of LGBTQ individuals have left employment due to hostile office settings, and greater than 50% are impacted by workplace discrimination.

As per studies from the What We Know project, gay individuals of color face discrimination in recruitment at nearly thrice the rate of their white colleagues.

These constant facts constrain job market possibilities, requiring job seekers to accept reasonably low wages and less desirable occupations than they desire or qualify for.

As a result, LGBTQ college graduates are more likely to earn less than $50,000 per year, significantly far below the national median income.

If you're concerned about workplace discrimination, use the Human Rights Campaign's (HRC) Corporate Equality Index to assess companies when applying.

The report rates workplaces based on policies and practices and helps people identify LGBTQ-friendly employers (and avoid those who aren't). Allies who wish to fight discrimination may do the same by vetting their employers to ensure that they are fair and helpful.

Self-employment can help many persons who experience challenges in the regular profession. Consider creating a freelance or advisory business using the abilities you already possess.

Negative financial habit issues

According to Adam Wood, Co-Founder of RevenueGeeks, “A recent Experian poll indicated that LGBTQ people struggle to save and have more negative financial habits than the overall population (34% vs. 28%). Younger LGBTQ people have more negative habits (like overspending)”. LGBTQ people have a hard time shopping with other people because they believe they are undervalued. On the other hand, one of the reasons to overspend might be demonstrating to others that they are owning great things or living an extraordinary life.

Adam also explains that “overspending is hard to break, but it's easier if you know why. Identify your spending triggers—stress, peer pressure, certain stores, etc.—and avoid them”.

There are a few options for breaking this habit.

• Keep track of your spending and create a budget to help you achieve your objectives.
• Cash is the only way to shop; no credit cards are accepted.
• Don't think you have "extra" money; believe you have invested your paycheck on your allotted purchases as soon as you get it.
• Automate savings account transfers and set a short-term savings target to feel accomplished.
• Join or create a Roth IRA if your workplace offers one. Save 15% of your paycheck if at all possible.

Debt Issues

LGBTQ+ folks have higher student loan debt than their heterosexual/cisgender colleagues. According to Student Loan Hero, they owe $16,000 extra in student loans. This difficulty can be caused by various circumstances, especially for students who lack financial assistance from parents who refuse to pay for their LGBTQ+ kid's college.

Borrowers can be denied for loans and credit cards lawfully on the basis of sexual orientation and gender identity. As per a Student Loan Hero survey, 40% of LGBTQ borrowers were denied financial aid for college due to their sexual orientation.

As per a TD Bank analysis, 71% of LGBTQ people with a bachelor's degree possess student loan debt, nearly one-fifth owing more than $100,000. Only half of the respondents thought their present financial situation was good.

The more significant student loan load sometimes boosts financial difficulties in other areas of life. Because of student loan debt, 41% of LGBTQ+ individuals acknowledged being unable to purchase their first home, and 23% were unable to buy their first vehicle.

Apart from student loan debt, many LGBTQ+ people seem to be concerned about debt. According to an Experian survey of LGBTQ people, paying off debt is one of the most significant financial difficulties that participants face (20%). Furthermore, 70% of participants said they use credit cards to acquire essentials.

As per the TD Bank report, 60% of LGBTQ employees got less than three months' worth of emergency money. According to a Federal Reserve survey, 40% of American individuals could not afford a $400 emergency bill.

Recent findings from The Motley Fool and the Debt Free Guys' LGBTQ+ Money Study explains:

• LGBTQ+ people are less likely than the general public to use critical financial tools, and the majority do not feel prepared to make critical financial choices. Only 37% of LGBTQ+ individuals have a retirement account such as a 401(k) or IRA, compared to 51% of the general population, and 44% maintain a non-retirement brokerage account, compared to 56% of the general population.
• Two-thirds of LGBTQ+ Americans (66%) say they are financially stressed. Their top financial objectives and issues are maintaining the cost of living and being prepared to face financial problems.
• In comparison to the general population, LGBTQ+ people are more likely to have student loan debt (37%), credit card debt (56%), and personal loan debt (56%). They're also less likely to be in debt (26% to 40%).

For LGBTQ+ people, the most effective way to handle debt is following a good budget plan. A 50/30/20 budget strategy will be useful for maintaining an emergency fund as well as paying off debts. Apart from that they can ask for professional help and opt for services such as credit card consolidation, debt consolidation, debt settlement, etc.

Housing Issues

Housing discrimination can significantly impact LGBTQ+ people, irrespective of their financial situation. As per Experian, 11% of LGBTQ+ people surveyed said discrimination caused them to pay more for housing.

According to Jordon Scrinko, the Founder & Marketing Director of Precondo, “LGBTQ+ are not accepted in many societies, and in some places, it's just against the law. And so, to survive in these societies, homosexuals pay extra for housing, to have a proper roof over their head.”

Only 24 states contain legislation prohibiting housing discrimination depending on sexual preference or gender identity, as per the U.S. Department of Housing and Urban Development. Several states only ban discrimination in housing based on gender or sexual preference, but not both.

The expense of residing in several LGBTQ-friendly places might be prohibitive for individuals. According to a Yardi Matrix research from 2018, the average cost of rent in the United States has grown from an all high of $1,405 monthly, while rent in large U.S. cities is often significantly more.

High living costs and regressive policies harm Low-income, transgender, and young LGBTQ+ community people. People who belong to these categories have a higher rate of homelessness.

According to the UCLA School of Law, around 8% of transgender individuals have been homeless. Homelessness is more common among black LGBTQ+ people than among white LGBTQ+ people. LGBTQ individuals account for 40% of homeless youngsters, as per the San Francisco State University Family Acceptance Project. Several of these youngsters are homeless because of their families' humiliation and unacceptance.

The LGBTQ+ group, women, and other special communities are all disproportionately affected by credit inequality. You may protect yourself by learning what sort of inquiries banks and lending institutions can ask when evaluating individual creditworthiness.

Consider obtaining a copy of your latest credit report to verify the accuracy of the information included therein. Before looking for loans, mortgages, or a place to rent, look for problems that can be remedied. If needed, consult an expert before making any decision.

Tax issues

As per the Supreme Court ruling in 2015, same-sex marriages are legal in the United States. LGBTQ+ spouses have the same opportunity to file together or separately as any married people. The following factors might influence their decision to file:

• Debt from student loans.
• Each partner's earnings.
• If any one of the partners is jobless.
• The family's total dependents.

The more LGBTQ+ individuals become financially strong, the stronger the LGBTQ+ community will be.

Irrespective of marital status or other considerations, high-earning individuals may owe thousands of dollars. So, depending on their situation, an accountant or tax preparer can explore the best solutions for them. They may be eligible for tax breaks that will help you save money.

Insurance Issues

Whenever it leads to insurance, LGBTQ+ individuals confront specific financial issues. Forty-two percent of the LGBTQ population lives in states with insurance protections. That coverage includes sexual orientation and gender identity, as per the Movement Advancement Project.

Gender confirmation operations are a health insurance concern. These are a considerable cost for transgender persons, costing thousands of dollars and often not covered by insurance. For transgender persons, affording these surgeries, whether with or without insurance, is difficult.

Furthermore, healthcare for LGBTQ+ persons is frequently jeopardized, such as when legislation allowing discriminatory practices in healthcare towards LGBTQ+ individuals is passed. Fortunately, President Biden signed an executive decree during his first day in office in January 2021 that strengthened nondiscrimination protections for LGBTQ+ persons, including healthcare.

Estate Planning issues

Estate planning involves putting the belongings in order and may include the following:

• Obtaining a durable power of attorney for monetary or medicinal reasons.
• Drafting a will, whether traditional or living.
• Developing trust.

Handling control of these items is very beneficial to senior individuals, but everybody, irrespective of age, must look for estate planning and implement changes as needed.

Legal rates vary by location, but people may have to pay anywhere between $300 and $1,000 per hour. The American Bar Association maintains a list of state bar associations that might assist you in narrowing your estate attorney search. Don't be afraid to ask a lawyer whether there's an opportunity for fee negotiation, installment payments, or a sliding scale.

Here are some examples of how estate planning might benefit LGBTQ+ individuals:

• In a same-sex relationship (but not marriege), a partner may have the authority to decide for the other if one partner is incapable or unwilling.
• A person can make sure that the belongings and money go to the people he/she wants.
• A person can name someone who isn't officially married to him/her as the heir.
• An individual can pick who will look after his/her kids.
• In case of an unexpected death, a person can authorize his/her relatives to sell assets and protect their financial future.

Retirement Issues

LGBTQ+ individuals have unique challenges while facing retirement. To begin with, they have less money set up for retirement as a community. This is due to several variables, including that LGBTQ+ people earn fewer dollars, as per a Prudential study.

According to the Prudential analysis, gay men earn $56,936 on average, whereas heterosexual men earn $46,469 on average. It also mentions that lesbian women earn $45,606 on average, compared to $51,461 for straight women. Bisexual males earn $85,084 on average, while bisexual women earn $35,980, as per the Prudential survey. Bisexuals make less than homosexual or straight persons, according to a study from the Williams Institute at UCLA School of Law.

According to the National Center for Transgender Equality's U.S. Transgender Survey, transgender persons are prone to be poor, which means they have less money set aside for retirement. Indeed, according to a 2011 research by the National LGBTQ Task Force, 15% of transgender individuals had a family income of less than $10,000.

If a couple belonging to this community aren't officially married as per the law, Social Security, pensions, and other retirement funds also couldn't be transferred between companions easily.

In addition, individuals of the LBGTQ+ community may have specialized retirement demands. Many LGTBQ+ people look for welcoming places in the country to call home during their post-work years. This frequently entails residing in cities with significantly greater living and housing costs than the national median. This may increase the cost of retirement for LGBTQ+ people.

Setting up automatic transfers into a savings account and setting a short-term goal for how much you want to save are the best ways to deal with your retirement saving challenges. If your employer offers one, enroll in it or open a Roth IRA. As a general rule, if you can afford it, strive to save 15% of your salary.

Medical Cost issues

Because of the Affordable Care Act, the ratio of LGBTQ+ uninsured individuals has decreased. Same-sex spouses may also acquire insurance through their partners. But still, medical and healthcare expenses have an impact on the LGBTQ group in the following manner:

• LGBTQ+ persons are more likely to evaluate their health as poor and to have more chronic illnesses, which are more expensive to treat.
• People who identify as LGBTQ+ are not so good at acquiring health insurance.
• LGBTQ+ persons are less likely to complete prescriptions but mostly postpone seeking medical attention, deny health services, and are mistreated by healthcare providers, all of which can contribute to more expensive healthcare demands in the future.

Healthcare expenses adversely impact the transgender community. As per Yale University and the Philadelphia Center for Transgender Surgery:

• Gender-affirming procedures can cost up to $100,000.
• The expense of ongoing care, which includes hormone therapy, can range from $25,000 to $75,000.
• Transgender people are six times more inclined to get mental health care for anxiety or mood problems, and so they frequently need prescribed medicines.

Several insurance policies cover all or part of gender affirmation surgery and follow-up costs. Transgender people can alter their names to suit their genders and sign up for health coverage in the Marketplace, according to HealthCare.gov.

LGBTQ+ unemployed individuals, single and low-income get cheap insurance alternatives. These alternatives include:

• Coverage under Medicare
• For minor dependents, the Children's Health Insurance Program (CHIP).
• Market insurance plans benefit from tax credits and subsidize a portion of the monthly bill depending on their income.

Physicians can also advise them on saving money on prescribed medications, which may save money on healthcare. Transgender patients must also read their possible insurer's summary of benefits page and ensure there is no discriminatory phrasing that could create issues in acquiring specific operations.

Family Planning Issues

People of the LGBTQ+ community have various alternatives for having a family. The cost of getting a kid is determined by several things, including if you want to adopt, give childbirth, or use surrogacy or other methods.

Same-sex partners can now adopt kids in all 50 states. Despite this, just 29% of LGBTQ persons are now raising kids, as per the UCLA School of Law.

When it comes to adding kids to their family through adoption, LGBTQ+ individuals still encounter hurdles. Some jurisdictions prohibit them from parenting kids, and if they want to adopt a kid from the foster care network, they may face increased scrutiny. Fertility procedures can be costly, but they may be more tempting for some couples. The costs of adoption and fertility procedures are not the same.

According to the Adoption Network, all partners interested in adopting kids must meet specific criteria, including:

• Being at least 21 years old.
• Having a solid financial foundation that can sustain daycare costs.
• Following precise psychological and physical health criteria. Potential parents can acquire letters from their specialists if they suffer a treatable chronic disease.
• Clearing an FBI criminal history check and demonstrating rehabilitation in the case of specific offenses. Some offenses automatically disqualify you from adopting a kid.

Besides adoption, several LGBTQ+ couples may desire to pursue having kids. Fertility clinics are frequently a viable option, and LGBTQ+ organizations often maintain lists of LGBTQ-friendly specialists. There are various possibilities, each with its own set of costs, benefits, and drawbacks:

• Sperm donation
• Egg donation
• Surrogacy

All of the above options can be used via in-vitro fertilization (IVF). Common issues LGBTQ+ couples may face related to IVF are:

Insufficient coverage - Only 15 states pay medical expenditures associated with reproductive treatments.

IVF Costs - An IVF cycle costs roughly $12,000 on average; however, some people need more than one cycle and may spend up to $33,000.

Pregnancy costs, excluding IVF - The Affordable Care Act gives advantages to pregnant women. If a pair uses a surrogate, the surrogate's prenatal treatment is usually not covered by insurance because she is not connected to the insured person. Her healthcare coverage can help fund the pregnancy, but users need to confirm this in advance.

Furthermore, some states prohibit gestational surrogacy or have introduced legislation to make IVF illegal. As a result, financial troubles may be compounded by legal difficulties.

There are various options for covering the costs of family planning. There are particular loans and credit cards offered for healthcare costs, as well as the following:

Several charities and organizations provide funding to infertile families and allow LGBTQ+ candidates. Parents-to-be who identify as LGBTQ+ must also contact their insurance carrier. They usually do not cover all costs associated with IVF, but you'll save the cost of medications and doctor fees if they do. Nontraditional techniques, such as crowdfunding, may effectively avoid debt when paying for IVF or adoption.