Historically, being part of the LGBTQ+ community has always come with adversity – and current times are no different. These challenges can shape how we think about our relationship to money. The fact that we are not equal in the eyes of the law can give us the message that we are not worthy or entitled to the financial abundance that is afforded to straight people. As a result, we can fall into a scarcity mindset that hinders our ability to build financial resilience and security.
In addition to societal influences, challenges in our personal lives can directly affect our finance resilience: We may have been disowned by family and no longer receive any financial support; we may need gender-affirming care and need to go into medical debt to get it; we may want to start a family and spend years savings up for adoption or expensive IVF treatments. These barriers mean we need to protect ourselves and our loved ones in different ways. We may have to build up more savings, invest creatively, or pay more for insurance.
Despite our circumstances, our history as well as our current situation show us that our community has always found a way to survive and thrive. To me, this is one of the best places to find inspiration for transforming a scarcity mindset into an abundance one. In the context of money, focusing on what we can control is what helps us build financial resilience.
In this post, we’ll discuss four practical steps that you can take to build lasting financial resilience, inspired by real-life examples from our LGBTQ+ community.
Four Practical Steps for LGBTQ+ Financial Security
Despite our unique challenges, LGBTQ+ folks have the ability and resources to achieve financial security. Here are some practical steps you can take to cultivate an abundance mindset and lay a resilient financial foundation for your future.
Identify What You Can Control
First, I want to acknowledge that these circumstances aren’t fair. And it’s ok to say that! There’s power in recognizing the reality of our situation because it forces us to name what we can and cannot control. Once you do that, you can move forward with the basic steps of financial planning. Build an awareness of your financial situation: How much money do you make? How much do you spend? Where is the money going every month? Does how you use your money align with your values? These factors are largely within your control and can help you build resiliency. Next, understand and identify the resources you do have access to. This helps you manage the scarcity mindset and focus on what you have in abundance.
Let’s say you can’t get health insurance coverage for a gender-affirming procedure without paying astronomical premiums. So, what can you do? In this case, I would encourage you to look at health insurance plans with low premiums that give you access to a health savings account. With a health savings account, you can save money toward health-related expenses tax-free. That’s one quick, creative way in which we can work around a system that doesn’t exist for it.
Play the "Worst Case Scenario" Game
It may seem counterintuitive, but I like to have our clients play the “worst-case scenario” game. This is especially helpful for our LGBTQ+ clients who face societal and personal roadblocks with finances. We have clients imagine their biggest fear about their lives and money. For example, a client may fear losing their job because of discrimination, putting their family at financial risk. In this case, we’re going to create a worst-case scenario bucket of money that covers all expenses for at least six months. Or, if the worry is that the family won’t be able to afford their mortgage, we’ll come up with a plan to pay down the mortgage faster. Imagining these types of scenarios – and their solutions – makes them less scary. Knowing the concrete steps you would take in the event of a crisis will make you more resilient amid them.
“Imagining worst-case scenarios – and their solutions – makes them less scary. Knowing the concrete steps to take in a crisis builds resilience.”
Build Up Savings
Once you get through the more qualitative exercises, you can start defining what you quantitatively need to do with your money and resources. Building up your savings is one of the cornerstones of financial resilience. This is especially important for LGBTQ+ folks who don’t always have family or other support to draw from. Having a savings buffer gives you peace of mind. You know that if something in your life goes awry (which it always does), you will still be able to pay the bills, feed and house your family, be protected, and get the help you need. In turn, this financial security gives you the freedom to go after the life you want.
Get Protection
The other important cornerstone is having insurance. Whether it’s health, life, or long-term disability insurance, having those products in place will protect not only you but also your loved ones. It gives you peace of mind that everything will be OK if something goes wrong. For example, a same-sex couple is looking for long-term care insurance because they’re entering the later stages of their lives. But one of them is HIV-positive, which means the insurance company immediately declines coverage. Fortunately, they have a significant amount of assets. They decide to embrace the abundance they have. They plan to take out a policy for the non-HIV-positive spouse and move a chunk of their money into a separate account for long-term care. That way, the money will be there for when they need it without affecting the rest of their financial goals.
Regardless of what laws and rights exist, the LGBTQ+ community has come far, even now. A brief look at LGBTQ+ history reveals remarkable progress in rights and acceptance over the past 50 to 60 years, demonstrating our community’s resilience. We can channel the persistence, optimism, and creativity of our community to shift our mindset from scarcity to tree-abundance. Paired with a solid financial plan, we can take back control of our financial security and ensure that our lives – and the lives of our loved ones – are protected. We deserve it.
Jim is a financial advisor and owner of Thinking Big Financial, Inc. Thinking Big Financial is a fee-only registered investment advisor offering financial planning and investment management services. Specializing in working with the LGBTQ Community.
Please read my legal disclaimer here.