When my husband and I started writing personal finance content a few years ago, the same problem kept coming up: what we were talking about didn’t quite apply to us. Of course, we were very proud that we helped our friends figure out their finances, but every time we turned in an article, we felt a little cheated.
Over the past two years, we’ve really begun to understand why we’ve always felt this way. We had to face financial difficulties that our heterosexual friends did not even think about. We have a line in our budget for starting a family (a $30,000+ venture), we had negative experiences with doctors simply because of who we are, and buying a house was difficult because we needed to limit the scope of the search to be more inclusive. (and more expensive) locations.
So today I want to address these financial challenges that the LGBTQ+ community has to face, and also offer some resources to overcome these barriers.
Is there an exit price?
Believe it or not, the act of coming out can lead to unexpected expenses. Samantha Hernandez, a lesbian financial coach, told me that after she came out, she felt pressured to look like the role, which ended up taking up a large portion of her budget.
“… I was adjusting to adulthood, working a new corporate job, living alone and trying to come to terms with my sexuality. I didn’t even have time to think about my finances. When I felt stressed due to one of the several transitional phases I was in, I would heal myself. You’re sad that you don’t look like a lesbian, go have lunch. You are afraid to go on your first date with a woman, to go shopping. The only way I knew how to manage was to spend money. I was forced to face my harsh reality when I accumulated $20,000 in credit card debt and didn’t want to continue living like this. This journey led me to teach others how to manage their money.”
For many people in the LGBTQ+ community, coming out is a very emotional and often difficult journey. Like most major life changes, spending money seems to be the only control a person has. As with Hernandez, this can lead to a serious unhealthy outcome that can be difficult to get out of (don’t worry, she got it!).
Read more: The relationship between your money and your mind – and why it matters
Housing can be harder (and more expensive) to secure
Many LGBTQ+ people live in cities. These areas provide greater access to the community and are generally safer for LGBTQ+ people. And it’s no secret that living in cities is much more expensive than living in rural areas.
Also, while discrimination based on gender identity is illegal in many US states, housing discrimination is all too common in the LGBTQ+ community. Transgender people, in particular transgender women, often face discrimination when looking for rental property, according to a report by the Urban Institute.
Read more: Top 10 LGBTQ+ Friendly Cities for Gen Z and Millennials
Family planning is expensive
On average, having a baby in the US costs between $10,000 and $30,000. Traditionally, this figure is associated with cisgender and/or heterosexual couples. LGBTQ+ families, on the other hand, need to consider a few additional expenses.
Here are just a few options (with their costs) that members of the LGBTQ+ community need to consider in order to have a child:
- Adoption – While the exact cost will depend on the type of adoption you choose (Foster, International, Domestic), the average cost to adopt a child ranges from $15,000 to $80,000.
- Surrogacy Again, this will vary depending on where you live, but between $100,000 and $150,000 is what LGBTQ+ families should expect.
- ECO – One cycle of IVF with the necessary drugs can cost more than $25,000.
- Sperm donation – A sperm donor alone can cost up to $1,000, and the hospital’s cost of having a baby adds thousands more to that cost.
These options may take years to save and years to actually execute. Besides, it’s just the cost have child, rather than raising a child or planning his future. For example, estate planning can look completely different for LGBTQ+ couples. Gregory Page-Rohmer, investment advisor at Lighthouse Financial Network, told me:
“Even though the legalization of same-sex marriage has made things so much better, LGBTQ+ couples may still have additional problems. Some LGBTQ+ people are still not getting married due to family or work issues, so they really need to plan their estate to make sure their partner (and possibly children) is cared for the way they want.”
While everyone should think about planning their estate, LGBTQ+ couples may need to plan their estate differently because they are not married. In addition, if the legal right to marry is ever revoked, it could be a major hurdle for LGBTQ+ couples and their children.
Read more: Do I need a will? Who needs a will (and when)
Health care costs can typically be
Health care costs are a concern for many Americans. Insurance is expensive, and prescription drugs cost a ridiculous amount. But the problems are often exacerbated for LGBTQ+ people.
First, simply finding medical care can be difficult, as many doctors still don’t understand LGBTQ+ medical issues, forcing many people to travel long distances to get the medical care they need. Page-Rohmer explained just a few of the extra costs that transgender people face:
“The Affordable Care Act has indeed helped more LGBTQ+ people get health insurance, but LGBTQ+ people still have some issues: Gender verification surgeries can cost $100,000 or more. Permanent care, such as hormone therapy, can cost $25,000 or more.”
These procedures are not covered by many insurance policies and are a must for transgender people who want to be themselves.
Read more: Understanding your health insurance: deductible, copay, co-insurance, and getting the most out of your pocket
Unfortunately, the LGBTQ+ community faces a pay gap, with LGBTQ+ people of color still facing the biggest pay gap. The Human Rights Campaign has completed an analysis that presents various members of the community:
- LGBTQ+ white workers – $0.97 for every dollar earned by typical workers.
- LGBTQ+ Latino workers – $0.90 for every dollar earned by typical workers.
- LGBTQ+ black workers – $0.80 for every dollar earned by typical workers.
- LGBTQ+ Native American workers – $0.70 for every dollar earned by typical workers.
The numbers differ not only by race, but also by gender identity:
- Gay/Bisexual – $0.96 for every dollar earned by typical workers.
- Lesbian/bisexual women – $0.87 for every dollar earned by typical workers.
- Nonbinary, genderqueer/genderfluid, dual spirit workers – $0.70 for every dollar earned by typical workers.
- Trans men – $0.70 for every dollar of typical workers. earn
- trans women – $0.60 for every dollar earned by typical workers.
It’s an uncomfortable reality, but LGBTQ+ youth can and do find themselves homeless more often than their peers who do not identify as LGBTQ+. Of the 1.6 million homeless young people, up to 40% identify as LGBTQ+. Due to the lack of parental support, LGBTQ+ students find getting into college a huge challenge.
First, completing the FAFSA can be difficult for an independent student without a permanent address. In addition, finding money to pay registration and entry fees, not to mention tuition fees, room and board, is almost impossible.
LGBTQ+ college students now face the challenge of finding a college that is an inclusive space. Finally, if they succeed, student loans can quickly become a problem.
A UCLA study found that LGBTQ+ students are more likely to take out student loans. A whopping 60% of these students regret the decision to take on a substantial debt burden.
Financial literacy in general is harder to get
One of the reasons why many of the above problems continue to persist is due to the lack of community-wide financial education. Hernandez spoke about how a lack of education can cause serious financial damage to LGBT people:
“Nearly all of my queer 1:1 money coaching clients are in credit card debt. The most common theme I see is that they spend money emotionally to deal with rejection after a revelation. Other reasons why queer people have to go into debt include: using credit cards for daily needs due to low income, [they] they lack family financial support, employment barriers that make it difficult to get high-paying jobs, and insurance companies that deny medical care for gender reassignment surgeries.”
Queers not only need to learn how to navigate the financial world like everyone else, but they also need to learn how to deal with challenges like the ones Hernandez commented on above.
While you should definitely keep coming back to MU30 for more LGBTQ+ financial resources, there are a number of nonprofits and organizations dedicated entirely to helping the LGBTQ+ community live a better life. Here are just a few that might help:
- Human Rights Campaign Student Scholarship Database – For LGBTQ+ students and their parents, HRC offers a database full of scholarship options that can help make college more accessible.
- LGBTQ+ Real Estate Alliance – The LGBTQ+ Real Estate Alliance can help you find LGBTQ+ friendly real estate agents, tax agents, financial advisors and more.
- National Center for Transgender Equality “With complete guides on school life, immigration, healthcare, and more, the National Center for Transgender Equality wants to help transgender people understand their rights.
- Stonewall Community Foundation – LGBTQ+ people can apply for grants and scholarships to help develop their organization or project. You can also apply for individual microloans.
- Horizons Foundation Grant Directory – The Horizons Foundation offers a list of hundreds of grants to help LGBTQ+ people in a variety of situations.
- Family Equality LGBTQ+ Family Building Grants – If you and your partner(s) are considering starting a family, Family Equality offers a list of available grants that can help reduce the financial burden.
- PFLAG – PFLAG is about helping LGBTQ+ people and their families. With local chapters across the country, PFLAG offers support groups, scholarship programs, online courses, and more.
Summary
Both in the US and around the world, there has been a long and slow struggle for equality. Unfortunately, this is still a long way off. Until then, LGBTQ+ people will continue to face financial situations that those outside the community often don’t have to think about.
Fortunately, there are a number of resources available for those who identify as LGBTQ+. Many nonprofits help LGBTQ+ people start families, go to college, start businesses, and buy houses.
Featured image: astarot/Shutterstock.com
