Today, as we recognize National Coming Out Day to give visibility and support to the LGBTQ community, we want to highlight a challenge we don’t talk about enough when we talk about LGBTQ issues:
It costs more to be queer.
Pay and wealth gaps affect every marginalized community in our country. You’ve probably heard about the gender pay gap that affects women in the workplace, but we hear a lot less about the barriers LGBTQ people face to building wealth.
Daylight, a queer-friendly banking platform, is designed to help topple some of those barriers. But it’s going to take much broader awareness and effort from the LGBTQ community and its allies to address these systemic financial issues.
Here are five common financial challenges LGBTQ folks face and how to address them in your life or support the people around you.
1. Lack of financial support
After graduating college with record student loan debt and entering a shaky job market, millennials have relied heavily on financial help from their parents.
Unfortunately, many queer millennials don’t have access to that lifeline. Instead, they’re forced to fend for themselves from early adulthood (or earlier) when unsupportive families cut them off financially and emotionally as punishment for coming out.
Without the luxury to wait for better offers, they may be forced into low-paying jobs, which has a cascading effect on wages throughout their lifetime.
Lack of financial support during the transition into adulthood also means more debt in many cases.
LGBTQ students take on an average $16,000 more in student loan debt than cishet (i.e. “straight”) peers. Like many millennials, that debt burden prevents queer folks from buying a home, buying a car, starting a family and getting married when they want to.
If you’re struggling to make ends meet because of a lack of financial support, look into relief options designed for LGBTQ folks in need such as For the Gworls, The Next Generation Project and the Ali Forney Center. Your local LGBTQ center may also have resources and programs to support LGBTQ houseless youth.
Allies can support these organizations through financial donations.
2. Workplace discrimination and pay gaps
Despite significant advancements in legal protections around gender and sexual orientation, queer people still face barriers to success at work.
Nearly 10% of LGBTQ people have left jobs because of hostile environments, and more than 50% are affected by workplace discrimination, according to a report by Out & Equal.
Unsurprisingly, the situation is compounded for queer people of color, who experience discrimination in hiring at almost three times the rate of their white peers, according to research by the What We Know project.
These persistent realities limit options in the job market, forcing applicants to settle for lower paying and less desirable jobs than they want or would qualify for.
The result? Even LGBTQ workers with a college degree are more likely than cishet college grads to make less than $50,000 a year — well below the national median income.
If you’re worried about job discrimination, check the Human Rights Campaign’s (HRC) Corporate Equality Index to vet companies before applying.
The report measures policies, practices and benefits to rate workplaces and help you find those that are LGBTQ friendly (and stay away from those that aren’t). Allies who want to fight discrimination can do the same — vet your company to make sure you give your time and labor to inclusive and supportive companies.
Many people who face barriers in the traditional workforce can also benefit from working for themselves. Consider starting a business like freelancing or consulting using skills you already have.
3. Health care costs
Queer folks, trans and gender-expansive folks in particular, experience significant barriers, blatant discrimination and ignorance while trying to access health care.
70% of trans adults and 56% of LGBTQ adults overall experience discrimination from health care professionals.
Even when discrimination isn’t blatant or intentional, many patients are in the position of having to educate doctors just to receive adequate treatment. Those who can afford to may find out-of-network providers and pay out of pocket — but, for many, that’s not a realistic option.
These circumstances deter LGBTQ folks from seeking basic preventative care, which puts them at a higher risk for health issues later in life.
That risk, along with the need for unique care like medical transitions, HIV prevention and treatment, and family planning services, adds up to increased health care costs. Now do the math, and imagine what it means when you put those costs on a population who’s less likely to have a job that offers health insurance or pays enough to cover it.
If you’re facing high health care costs, start by checking the health insurance marketplace at HealthCare.gov to make sure you’re getting any assistance you qualify for.
For health care needs that aren’t covered by your health insurance, look for grants and free services designed to cover the unique health care needs of our community, including:
4. Cost of living in inclusive and affirming communities
Many LGBTQ people are inclined to move to more inclusive areas as adults because they grew up in communities — and with state laws — that don’t welcome or affirm their identity.
The greatest concentration of LGBTQ populations happens on the coasts and within major metro centers, where state laws and local cultures are intentionally inclusive and affirming. Unfortunately, those areas are a lot more expensive to live in than small towns and Midwestern states.
If you’re concerned about the cost of living, start by figuring out how much you can afford to spend. Use Mint’s rent budget calculator to figure out your ideal cost for housing. Then research the cost of living in areas you’re interested in to find something that aligns with your budget.
You don’t have to go to New York City or San Francisco to find inclusive culture. Secondary cities like Seattle, Portland, Austin or Chicago are slightly more affordable and increasingly diverse.
Even small cities, especially those with colleges and universities like Madison, Wisconsin; Columbus, Ohio; and Salt Lake City, Utah, have thriving LGBTQ communities.
5. Access to loans and credit
You might not realize it, but borrowers can legally be denied loans and credit cards on the basis of sexual orientation and gender identity. Just 15 states have laws in place to protect against this kind of discrimination.
According to a Student Loan Hero survey, 40% of LGBTQ borrowers said they were denied financial assistance for college because of their sexual orientation.
Lack of access to student loans can mean delaying or forgoing higher education, working during school and taking longer to graduate, or dropping out before completing a degree. All of this has a ripple effect on job prospects later in life.
If you don’t have access to enough financial aid to cover college costs, find other creative ways to pay for college. Scholarships and grants are a common, debt-free way of covering college costs, and HRC maintains an LGBTQ Scholarship Database to help you find funding.
Restricted access to credit cards excludes people from benefits like building a strong credit score and enjoying money-saving rewards.
Plenty of banks proclaim LGBTQ pride with rainbow-themed credit cards — but you’ll have to look below the surface to find products that truly meet your needs.
If you have trouble getting credit, seek out financial institutions that offer credit cards designed for people with low or no credit score, such as the Discover it card, Credit One Bank and Petal. These companies might not fly pride flags, but they’re doing real work to increase access to credit for vulnerable communities.
Arm yourself to face queer money challenges
The stats are hard to read, but we refuse to believe the outlook for the queer community is bleak.
LGBTQ friendly banks and financial institutions can make a major impact on the financial well-being of this community. Daylight has created the first banking platform that rewards LGBTQ folks for types of spending that support queer values and communities.
More inclusive practices and legislation around banking, lending, investing, hiring and health care can alleviate many of these longstanding and pervasive challenges — both queer folks and allies can urge lawmakers and businesses to make these changes. Contact your elected officials to make your support for the queer community known, and choose products that align with your values.
Daylight and Mint invite financial institutions to further support the LGBTQ community and encourage you to choose financial products and companies that do.