Financial Planning
June 1, 2022

6 LGBTQ+ financial challenges in 2022

Financial challenges and inequalities remain in LGBTQ+ communities despite recent legal protections.

LGBTQ+ Americans still have a long way to go to get over the rainbow, despite recent victories in protections and rights. 

Poverty rates, food insecurity and lower earnings are discouragingly high for gay, lesbian and trans people across the country. Workplace bias continues too, and higher healthcare costs are an everyday reality. 

The perception of LGBTQ folks as prosperous urban dwellers undoubtedly persists, but the reality is different, with continuing discrimination and a very real “gay pay gap.”

Equal protections, unequal financial realities

The past several years have brought both major advances and serious setbacks in LGBTQ+ rights, complicating our financial lives while we face new and old uncertainties.

Two landmark decisions have redefined our financial prospects: the 2015 decision extending marriage to same-sex couples and 2020 decision barring discrimination in employment. Both have had enormous impact on our financial security, from securing property rights to enabling more stable paychecks. 

But hurdles remain – challenges unique to the LGBTQ+ community. As LGBTQ+ rights have expanded, our economic well-being still lags behind most Americans.

1. Food insecurity is all too common

Not having enough money for food is more common in the LGBT community than with other Americans. One in four LGBT people experienced food insecurity in 2019, according to a UCLA Williams Institute study. That percentage is more than twice the number experienced by the general population.

One in five gays and lesbians between the ages of 18 and 44 received government food assistance in 2014, and in a 2021 survey of LGBT elders, over half were on government food assistance programs and 71% reported experiencing hunger but did not have enough money to buy food.

2. The “gay pay gap” remains 

In a 2022 Investopedia report, a Prudential study shows the average income for gay men is $56,936, while the average income for straight men is 46% higher, at $83,469 on average.

The same study also notes that lesbian women make $45,606 on average, while straight women make $51,461.19 (Although other studies argue that lesbian women earn more than straight women on average.) 

Gender pay gaps remain in the community too. A recent MSNBC report reveals the average household income for female same-sex couples was nearly $100,000 versus $130,000 for the average same-sex male couple.

After a lifetime of lower earnings, the LGBTQ+ community is also under-prepared for retirement, saving less than most Americans on average. LGBTQ+ elders also struggle with different needs, with many moving to more accepting parts of the country in their retirement years, where living and housing costs can be much higher. 

3. More student loan and credit card debt

The average LGBTQ+ family also carries more debt than other American households. LGBTQ+ families hold $12,065 in credit card debt - 16% more than heterosexual families.

Recent LGBTQ+ college graduates also have more student loan debt than their straight peers – 17% more on average. That’s $16,000 more in gay student loan debt than cisgender/heterosexual grads.

To align with Supreme Court’s 2021 Bostock decision against employment discrimination, the Consumer Financial Protection Bureau formally clarified that “discrimination by lenders on the basis of sexual orientation and gender identity is illegal.”

4. Bias in the workplace continues

Earning a steady income year after year is essential for financial stability. But many queer workers face biases that can interrupt their professional lives.

Despite legal protections against employment discrimination, 47% of LGBTQ+ workers believe being “out” at work could hurt their career, citing everything from losing their job to missing out on promotions or special projects. 

Maybe most surprising, given strides made to date: 43% of LGBTQ+ workers are not fully out at their workplace, and at the top, queer representation is miniscule, with less than 0.3% of directors at Fortune 500 companies serving out and proud.

5. Family planning is more expensive

LGBTQ+ people face unique financial challenges when it comes to family planning. Adoption can cost from $20,000 to $70,000, ranging from domestic to international adoptions. IVF can cost $13,500 to $21,000 or more, and surrogacy can cost as much as $150,000. 

Any family living outside of conventional biological childbirth can encounter these costs, but almost all LGBTQ+ folk face them. 

6. Healthcare challenges hinder financial success

Almost 30% of LGBTQ+ Americans report having a hard time affording necessary medical care. More than half of transgender Americans reported the same, with 1 in 3 required to “teach their doctor about transgender lives in order to receive appropriate care.”

The disparities are even more stark with LGBTQ+ minorities. According to a new report by the Trevor Project, 40% of queer Asian American and Pacific Islander youth considered suicide in 2021, with approximately 16% attempting suicide. (Among all young Americans, that number is stands at 8.9%). 

More resources and education can help

Limited freedoms and restricted self expression can have deep repercussions, from low financial literacy to stalled education to limited work opportunities.

But more and more resources are available, from queer financial advisors familiar with our unique issues to LGBTQ-conscious investment funds

Recommended Readings:

12 cost-saving tips for wedding budgets

Quick ways to become debt free

Pranay Chirla
Technical Content Writer
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