It’s Pride season! Rainbows, glitter, and unicorns are everywhere. Many will be marching in parades and connecting with our Pride family who we may only see a few times a year.
But, did you know there’s more than one way to take pride in yourself? It’s one thing to take pride in who we are. It’s another to take pride in how we care for ourselves physically, personally, mentally and, yes, financially.
Taking pride in our financial safety and security, unfortunately, often falls low on the long list of things that require our attention, maybe even interest. Fortunately, there are a couple of simple things we can do to change that. Here are seven.
1. Get the basics
Let’s make our lives a little easier and cheaper. Prudential reported in its 2018 Financial Wellness Census that 50% of LGBTQ respondents to its survey don’t own a single banking product, including a checking or savings account. Not using the tools designed to help us succeed in our financial lives makes it harder to achieve financial success and, in fact, affects other aspects of our lives, such as our relationships, job performance, and health.
Likewise, using alternative banking solutions, such as check-cashing stores and money orders, while initially easier than opening a banking account, increase the costs of financial transactions.
Yes, transgender folks have challenges with using their chosen name over their birth name when opening bank accounts. This has long been a delicate situation as banks typically need a full legal name to manage fraud security on an account but still aim to be inclusive to their customers. Plus, many can’t afford the minimum opening balances and annual fees some banks charge. However, there are banks and bank accounts that don’t have those fees.
The Capital One 360 Checking and 360 Money Market accounts require no opening or monthly minimum and have no annual fees. Capital One Bank also lets trans individuals use their chosen name after all the federally required information has been documented and verified.
There are virtual banks that require no opening or monthly minimum and have no annual fees, such as Varo, Chime, and Ally. The little effort required to open these accounts will decrease your everyday costs, simplify your life and reduce financial stress.
2. Create your cushion
The second basic that many Americans are missing is an emergency savings account. It was recently reported that 40% of adult Americans couldn’t pay for a $400 emergency with cash. Consequently, they would need to rely on a credit card or another loan that would likely increase the cost of their emergency.
The traditional advice is to save three to six months’ worth of living expenses in an account used only for emergencies. When most people do the math (total living expenses multiplied by 3 and 6), saving that sum of money feels so far out of reach they don’t try.
Don’t sacrifice the good for the great. Start your emergency savings by setting up a recurring contribution of as little as $5 a paycheck into an account – maybe one of the above – that you designate for emergencies only.
Most of us can find $5 a paycheck or $10 a month to set aside for our financial security. It’s maybe increasing the deductions on our W-4 deductions or using coupons to save money on things we purchase regularly.
Most employers can pay their employees using an automated system called Direct Deposit, once you designate your account and set up your automatic direct deposit, you can almost forget about it.
We say “almost” because you don’t want to completely ignore any part of our financial life – that’s the point of this article – but not looking at this balance every day will make it feel like you’re saving money faster than you would expect.
3. Write a proud money story
Our money story is the story we tell ourselves and our friends about money based on our beliefs about money.
From the LGBTQ people we work with, the ones we meet around the country and from our own experiences, there’s a common struggle many of us have. While wishing we were wealthy ourselves, we simultaneously have negative opinions of rich people and money.
The news mostly covers stories of fraud, embezzlement and Wall Street scandals because these stories grab our attention. The movies and TV shows we gravitate to are often about rich, unsavory people.
When we have negative perceptions about money and wealth, we subconsciously sabotage our financial security. We’re less likely to take the fundamental and, especially, the advanced steps to financial independence.
The truth is there are more stories of good people who authentically earned their wealth and who use their successes to help others. So, we as good people should all want to be financially secure if for no other reasons than to amplify the good we already do.
4. Create a happiness budget
Another common theme of LGBTQ people is we often spend our money to make ourselves feel better, which by itself isn’t bad. When we overspend to numb lingering pain from challenging childhoods or struggles as adults because of our sexual orientations and gender identities, it can cause financial insecurity.
Often that spending provides short-term satisfaction and keeps us from our bigger financial goals. This just creates more future pain.
Create a happiness budget for yourself. Dig deep and understand what’s most important to you, then create a savings plan to achieve those goals. Typically, when we stop spending to impress others or stop spending how other’s think we should spend, we start spending according to our own values.
That’s when we gain more satisfaction from how we use our money.
5. Plan for the future
Retirement. It’s often too far away to plan for until it’s too late.
Prudential also found that 55% of its LGBTQ respondents have saved nothing for retirement.
If your employer offers an employer-sponsored retirement account, open one. This type of account is usually funded through a combination of your pretax income, which lowers your taxes, and possibly a matching contribution from your employer. That’s free money!
If your employer doesn’t offer a retirement plan, open an Individual Retirement Account (IRA) with an online advisor such as WealthSimple, Betterment, Stash or SoFi. All these companies offer services to help you manage the investments in your IRA account, so you don’t need to go it alone.
As with your emergency savings account, invest as little as $25 a paycheck. Set it and forget it. Then, increase your contribution when you get raises and promotions.
6. Consider investments that are proud of you
Talking about investments, we’re frequently asked if there are investments that are socially responsible and that support the LGBTQ community. Yes, there is.
The Exchange Traded Fund (ETF) PRID is a basket of companies that earned an 85 or higher on the Human Rights Campaign’s Corporate Equality Index (CEI). To earn a 100 on the CEI:
- “participants must offer parity between different- and same-sex spouses and have coverage available for domestic partners of enrollees,
- participants must remove transgender exclusions from all benefits plans, and
- participants must include LGBTQ suppliers as part of their supplier diversity program (if such a program is in existence)”
WEQRX is a mutual fund that invests in companies that also offer LGBTQ protections to their employees “in addition to inclusionary hiring and promotion policies, because it believes these traits can enhance a company’s growth trajectory, long-term financial success and ability to pay a dividend.”
Finally, SPDR® SSGA Gender Diversity Index or SHE ETF is a basket of companies that are inclusive of all genders all the way up the corporate ladder, including senior management and executive-level positions.
With these types of investments, not only can you be proud to be investing in companies that promote inclusion, you’ll encourage more companies to do the same.
7. Start talking about money
Finally, start talking about money with your friends, your colleagues, and your family. We don’t learn about money in high school or college. Many of us were raised believing talking about money rude.
The truth is when we talk about money, we do better with our money. By sharing with others what’s working and not working for us, what our financial goals and challenges are, we make slightly better decisions in our day-to-day lives that yield transformational change over time.
The truth is, taking pride in our money doesn’t require drastic change, and even the simplest steps produce amazing results. Do yourself and the queer community a favor and take pride in your money this Pride season and all year long.