What financial planning looks like for LGBTQ people

I married my wife last October in a backyard wedding my parents hosted and covered for $5,000. My wife’s mother gave us an equivalent honeymoon fund to fly us to France, and our guests were also generous and—to our surprise—gave us a few thousand dollars to start our new life.

Of course I knew that people got money for their marriages, but this seemed like an abstract, heterosexual concept: free money to love someone? In my experience, nothing about being a lesbian came without, at the very least, a metaphorical price tag.

But that’s just my experience. In June, Pride Month, many people honor the history, struggles and joys of LGBTQ people. It’s also a time to celebrate the ways we are different and how we relate to the world around us – which got me thinking about money.

LGBTQ people have to navigate many systemic drawbacks: disproportionate student debta wealth and savings gapless access to the generational wealth of our relatives, food insecurityand incalculable losses associated with housing, recruitment and discrimination in the workplace. Marginalized identities such as race, immigration status, and disability compound the financial disadvantages.

Financial planners are overwhelming older white men who may not be equipped to deal with the concerns of LGBTQ people. Most bank accounts require a legal name, which can be difficult for LGBTQ people who have different, chosen names.

I wanted to explore how other LGBTQ people feel about personal finances. Money in the gay community can be volatile, communal and scarce, which can affect our financial planning decisions.

Carla and Claire Sherman

Carla and Claire Sherman live in St. Louis with their 4-year-old son, Linus. Carla, 49, works in a warehouse and earns $34 an hour, and Claire, 37, works in nonprofit fundraising and earns $52,000 a year. Both spouses feel they need to save more, but between high inflation and monthly costs of $1,200 for the mortgage, $1,400 for tuition at Linus’ Montessori program, $400 for two leased cars, and $600 for groceries, the family is just holding up .

Carla, who already works six days a week, considers taking a second job to pay off a credit card. “But the thought of her working third shift six days a week and then taking care of Linus part of the day and then doing another job seems insane to me,” Claire said.

The family receives financial support from Claire’s parents, who helped with living expenses when Carla took a year and a half off to care for Linus during the pandemic. They also helped pay off Carla’s student loans. Carla has a different experience with her parents. They have not given her the same level of support, and she believes they have left her out because she is a lesbian.

“When I came out in the ’90s, it was so much different, and it seemed like it was still okay not to be okay with having a kid who’s gay,” Carla said, adding: “They didn’t even offer to give money for our wedding.

Linus was born in 2018, and the couple estimate they spent $7,000 on six vials of semen, a few hundred dollars on fertility testing, and $250 to $500 (with insurance) on each of their three pregnancy attempts. They couldn’t save up front and used credit cards throughout the process.

Still, the Shermans got pregnant relatively cheaply through intrauterine insemination, which is usually the first and cheapest stop in assisted reproduction. With insurance, the birth was another $12,000 in out-of-pocket costs.

While in the hospital, Claire, who was carrying their child, was presented with paperwork with no option for same-sex partners. On the form, she crossed out “father” and penciled “second mother” before writing their names.

Yassin Adams

“My grandma used to tell me that me and my dad had holes in our palms,” said Yassin Adams, 36. Growing up in Egypt, he watched his dad, called “the poor millionaire” by his mom, speak to family, friends and neighbors cared. Mr. Adams has followed his father and made sure that the people in his life are taken care of.

“It doesn’t matter if we are friend or foe, this is community work,” he said.

Mr. Adams graduated from an Egyptian medical school in 2010 before moving to Ohio in 2015. He applied for political asylum in the United States as a former Muslim and queer person before coming out as transmasculine and non-binary and beginning his medical transition.

Mr. Adams now lives in San Diego and earns $90,000 a year as a clinical research associate for a private company. Yet he lives from paycheck to paycheck.

“Because I’m earning that salary, I feel a moral responsibility to take care of other people in my life who are essentially my chosen family,” he said.

Four members of his chosen family (close relationships that LGBTQ people form separate from their biological relatives) are currently dependent on him, Adams said. It can be difficult for his friends to accept help – they don’t want to receive handouts or feel like a burden – so he invites them to help him with small household chores in exchange for money.

But Mr. Adams is also struggling. In addition to typical expenses such as $1,500 in rent and $500 in car loans, he owes tens of thousands of dollars to a rehab center he attended for addiction issues, has $5,000 in credit card debt, and $4,000 in medical debt. Mr. Adams also pays $5,000 every three months for hormone care.

Healthcare is an important item for everyone, but it can be especially challenging for the LGBTQ community, said Josh Andreasen, director of financial planning at Edelman Financial Engines.

“With such a patchwork of state-to-state laws regarding health care, it can be extremely difficult to find and pay for the services you need,” Andreasen said in an email. “Gender-affirming surgeries for trans people can be extremely expensive, costing more than $100,000.”

“I would pay any money to be a trans queer person,” he said. “I have time to spend, you know what I mean?”

There is a communal approach to money and a responsibility to provide, which Mr. Adams says is common in queer and transgender circles. It’s an insider’s joke, a little eloquent, but shows fierce pride: gay and transgender people give the same few dollars back and forth over and over to help each other. Because, as Mr. Adams put it, who’s going to fund trans people if it’s not them?

Bex Mui and Cheryna Guzman

Bex Mui and her fiancé, Cheryna Guzman, are a lesbian couple living in Oakland, California. Ms. Mui, 38, is an independent wealth advisor and advocate for LGBTQ inclusion, while Ms. Guzman, 31, works in event production as a video technician. Together they earn about $155,000 a year and want to start a family, but the financial barriers feel great.

The couple is struggling to come up with a realistic parenting time frame, Ms Mui said. Mentally and emotionally they are ready for children, “but we can’t bring a baby into the world like that,” she said.

Ms. Mui often thinks about how much easier it is for heterosexual couples to have children. Instead, for her and Ms. Guzman, trying seems like endless appointments and strategic planning: finding a sperm donor, navigating legal fees and parental rights, fertility testing, and in vitro fertilization.

It’s a frustrating challenge, Ms. Mui said, because the couple believe they earn less as women of color. The couple has no family planning savings because they are saving for a wedding.

On average, intrauterine insemination can cost $300 to 1,000 per cycleand in vitro fertilization costs average $12,400 per cycle; with medication, the cost can be closer to $25,000. With either option, most people will need multiple cycles of treatment, and it’s not uncommon for families to spend tens of thousands of dollars.

At worst, Ms Mui said, these financial barriers could prevent them from having a child.

Access to clinics and doctors experienced in LGBTQ health also play a role in the couple’s financial equation. “We’re lucky to live in California,” Ms. Mui said. Despite the cost of living on the West Coast — the couple pays $2,200 for their apartment and estimates another $1,000 a month for food, gas, and other bills — family planning feels easier in a liberal state.

Micah Amani

Mikah Amani, 22, is a singer-songwriter living in Miami. His rent is only $500 a month, mainly because he lives in a strange house with four roommates. Mr. Amani had a full-time job as a barista, earning $13 an hour plus tips, but he left it last month because, he said, customers constantly misinterpreted him and he had a racist encounter with a co-worker.

Black trans people like Mr. Amani are particularly vulnerable to workplace harassment and economic uncertainty. A report of the National LGBTQ Task Forcean advocacy group, found that black transgender people had an unemployment rate of 26 percent, four times the national rate and twice the rate for the general transgender population.

Quitting his job was a relief, but Mr. Amani had no income. He counts on the support of his parents and grandparents.

Financial insecurity has affected Mr Amani’s access to gender-affirming care. He had planned a date for top surgery this month, but knew even before he quit his job that he wouldn’t be able to afford it. Through crowdfunding — a strategy many LGBTQ people use while relying on their community — he raised about $1,400, but that money was diverted to direct spending. With insurance from his old job, the surgery would have cost about $5,600 out of pocket.

“Being in survival mode right now is my focus,” he said. “I can’t hold on to the fact that I can’t have top surgery right now because it’s just not practical.”

Noelle Soncrant, financial advisor at Northwestern Mutual, said in an email that “financial planning is a critical part of closing the financial gap facing the LGBTQ+ community.” But until homophobia and transphobia are systematically tackled, financial literacy alone is unlikely to ever close the gap.

Transphobia has had a ripple effect on Mr. Amani – it’s why he quit his job as a barista, lost his health insurance and why he had to pass up other opportunities. Mr. Amani was offered a paid gig to play music at an elementary school, but declined due to Florida’s anti-LGBTQ laws.

Mr. Amani does go to his mother, a midwife, and his father, a private equity advisor, for financial advice, but he would also like to see a financial advisor who can empathize with his experiences. He hopes a financial advisor can help him build the life he wants: full of music, gender euphoria, travel, and the ability to support his younger siblings.

“I would like to see someone who is trans, someone who is black and someone who may have been in a similar position to me,” he said.