LGBT financial survey 2018 shows young adults feel their finances are “Out of Control”
By Jim Akin and Brian O’Connor for Experian
Most members of America’s LGBT community say they are more inclined to save money than to spend it. But a closer look at their habits suggests the opposite may be true, according to a new Experian survey.
Asked to characterize their habits on a zero to 10 scale, with zero denoting “spender” and 10 denoting “saver,” more than half (52%) of LGBT respondents placed themselves in the six-to-10 “saver” range. But LGBT financial survey 2018 responses to more detailed follow-up questions gave a decidedly different impression:
- More than two-fifths (44%) of LGBTQ respondents said they struggle to maintain adequate savings vs. 38% of the general population.
- Just over one-third (34%) of said they have bad spending habits that they’d like to improve or change vs. 28% of the general population.
- LGBTQ respondents estimated they devote 16% of monthly income to discretionary spending, but just 11% to saving or investment.
In conjunction with LGBT Pride Month 2018, Experian surveyed 500 individuals who identify as LGBT to learn more about their financial behaviors and attitudes. The survey also included 500 non-LGBT Americans. Some interesting differences between the survey respondents emerged. But even more striking differences were found within different age groups in the LGBT population. This was shown particularly with 25-to-34 year-olds in contrast to their older counterparts.
The idea for the survey was sparked by a conversation with our friends the Debt Free Guys, about the dearth of data on the financial views and challenges specific to members of the LGBT community. “We’re happy and proud of the LGBTQ community’s progress over the past 15 years… but we aren’t done yet,” the Debt Free Guys write. “We’ve got a lot to take pride in today. Let’s be able to have pride in our money.”
The LGBT Young and Anxious
Much of this concern rests with the youngest segment of the LGBT community included in the LGBT financial survey 2018, individuals age 25 to 34.
- 53% of respondents in that age group reported struggling to maintain savings.
- 49% disagreed with the statement “I am in control of my finances” vs. a range of 56% to 58% for those aged 35-64 and 75% for those 65 and up.
- 49% of the 25-to-34 year olds reported having bad spending habits — a condition that diminishes with remarkable consistency among members of successively older LGBT age segments.
“Everyone knows the stereotype of ‘keeping up with the Joneses,’” says David Rae, a Los Angeles-based financial planner with a practice focused on the LGBT community. ”Well, there are gay Joneses’ too. [For some] having the latest iPhone or iWatch or car or whatever can begin to feel like a necessity.”
In a ranking of financial concerns among LGBT respondents, the top entry, saving for retirement, was cited by 29% of respondents. Paying off debt ranked second, listed by 20% of respondents. Saving for retirement is the biggest financial concern for LGBT members. But paying off debt is just as big a concern for those 25-34 LGBTs.
LGBTs “…definitely faces some challenges in retirement,” Rae says. “Many don’t have children who can help care for them as they get older. Some are also disconnected from their families and cannot count on support from siblings or other relatives.”
Digging More Deeply Into Spending Priorities
When asked about the types of goods and activities for which they most wish to set money aside, members of the LGBT community find it more important than their non-LGBT counterparts to set aside money for entertainment.
“It boils down to priorities,” Rae says. “If you look online at financial planning sites, one of the first things they talk about is saving for kids’ college education. Since many [in the LGBT community] don’t have children, they’ve got way more money to spend on housing or a car or travel.”
In responses consistent with their reported anxiety over spending habits, LGBT financial survey 2018 respondents in the 25-to-34 and 35-to-44 age rated discretionary spending more important than their older counterparts in a wide variety of categories, including:
- Personal Hygiene
- Health and Fitness
- Dining Out
- Home Décor
- Charitable Giving
- Drinking and Partying
- Sporting Events
- Other Entertainment
The one exception to this is travel, which LGBT respondents over 65 prioritized more than any other other age groups. Not surprising since they’re more likely to be retired.
Are LGBTs spending to much?
Asked about activities on which they feel they overspend: 20% of respondents in both the non-LGBT and LGBT populations cited travel, but a significantly larger portion of gay men (26%) reported doing so.
LGBT respondents in the 25-to-34-year-old age group reported overspending at significantly higher rates than older counterparts in the areas of personal hygiene (26%), clothing (38%) and dining out (53%). Dining out was named as a significant source of overspending for nearly half (46%) of all LGBT respondents.
That’s a familiar theme to Rae. “Eating is often a matter of going out for a great meal with your friends, not just feeding your family. ” And dining out can be a particularly expensive proposition in urban centers with thriving LGBT communities.
Credit card usage of LGBTs
The survey examined credit card usage among LGBT respondents age 25 and older, and found the following:
One-fourth (25%) of LGBT respondents in the 25-34 age group, and 18% of LGBT respondents overall, have no credit cards in their names.
Asked to give their main reasons for using credit cards, a majority of LGBT respondents agreed on two answers:
70% reported that they mainly use credit cards to purchase necessities; and 55% said they use credit cards to get rewards, including airline miles, hotel stays, and cash back. And nearly one-third (32%) of all LGBT respondents say they use credit cards to improve or build creditworthiness. But half (50%) of LGBTQ respondents age 25-34 gave that reason.
These responses are common — 69% reported using credit cards to buy needed items, and 53% cited rewards programs as a reason for using credit cards.
Bias and discrimination are causes of some financial challenges
A significant majority (62%) of LGBT respondents reported having experienced financial challenges because of their sexual orientation or gender identity.
- Discrimination or harassment at work (13%)
- Being passed over for a job or (12%)
- Marriage inequality laws that reduced retirement security for couples (11%)
- Discrimination leading to higher housing costs (11%)
- Lower salary or reduced chance of promotion (10%)
While the U.S. has made significant progress on protecting the rights of LGBT citizens, employers in the majority of the country are still allowed to fire workers for the simple fact of being gay or transgender.
The Laws Protecting (or Not Protecting) the LGBT Community
According to Out & Equal Workplace Advocates, a global nonprofit dedicated to LGBT workplace equality, 28 states still allow employers to fire someone for being lesbian, bisexual, or gay, and 30 states still allow transgender workers to be fired.
Meanwhile, 22 states and the District of Columbia have laws to prohibit employment discrimination on the basis of sexual orientation and/or gender identity. You can find a comprehensive list of state laws on LGBT protections (or lack thereof) here.
Rights for LGBT workers have taken two big hits recently. The first was President Donald Trump’s July 2017 ban on allowing transgender individuals to serve in the U.S. Military. It included an unsubstantiated claim that trans soldiers, sailors, and airmen cause “tremendous medical costs and disruption” in the armed forces. (A federal court ruled in June that the ban cannot be put into action while lawsuits are pending against it.)
In the same month, the Dept. of Justice argued that Title VII of the Civil Rights Act of 1964 prohibiting workplace discrimination doesn’t protect against discrimination based on sexual orientation and gender identity. Title VII does ban workplace discrimination based on sex, race, color, national origin and religion, and some federal courts have ruled that it protects LGBT people.
Despite those political defeats, many major employers welcome LGBT workers. According to Out & Equal, 92% of Fortune 500 companies protect LGB workers against discrimination based on sexual orientation while 82% have nondiscrimination protections for transgender employees added too.
What can I do if I am discriminated against?
If you are a victim of discrimination in hiring or in being fired, consult an employment rights attorney right away. If you’ve been dismissed, try not to sign any severance agreements. You’ll also need to file a report with your state labor department and the federal Equal Employment Opportunity Commission before taking any legal action. And there are strict time limits for you to act. You can find out how to file a claim here.
Collect and keep as many records as you can. You should include the names, titles and contact information for any potential witnesses to the discrimination, or other coworkers who were treated unfairly or illegally. Contact local LGBT rights groups, as well, for support and advice, as well as recommendations for legal representation. You can find resources by state on the Human Rights Campaign website.
The best financial defense, however, is often to identify potential employers who not only won’t discriminate but will welcome and support LGBT employees in their workforce. One resource to check out is the The National LGBT Chamber of Commerce. It is the business voice of the LGBT community, the largest advocacy organization dedicated to expanding economic opportunities and advancements for LGBT people, and the exclusive certifying body for LGBT-owned businesses.