Pride & Prosperity: Supporting LGBTQ+ Financial Health

In honor of Pride Month, Harvard FCU is exploring the unique financial challenges faced by members of the LGBTQ+ community and sharing a few solutions to help.  

Emergency Savings 

The data shows that many members of the LGBTQ+ community face higher rates of poverty and financial instability when compared to other groups. While these problems are systemic in nature—often related to workplace or housing discrimination, healthcare access or ruptured family ties—it’s still important for individuals to understand how to bolster their financial security as much as possible. Building an emergency savings account is an important part of that journey. Experts recommend keeping three to six months worth of living expenses in an emergency account, which can be an essential cushion in case of a sudden loss of employment or housing. For more on how to start an emergency fund, start here. 

Credit  

Around 16 percent of LGBTQ+ Americans report having a poor credit score, in comparison to 8 percent of people outside the community. Living with poor credit can affect your finances in a number of ways, making it more difficult to rent an apartment, qualify for a home mortgage, or choose the lowest-cost and highest-reward lines of credit. If you’re struggling with a low credit score, limit new credit card spending and prioritize paying off high-interest debt as soon as possible. Refinancing, loan consolidation and 0% interest credit cards can help—and you can find more credit tips here. Harvard FCU members can also take advantage of free debt counseling through the GreenPath Financial Wellness Program.  

Travel 

When planning a vacation, individuals in a same-sex relationship or with a nontraditional gender presentation may be more thoughtful about their chosen destination. This caution is necessary to avoid potential discrimination, harassment or even legal difficulties—but the necessity of being choosey can also mean higher travel costs. Check out vacation savings tips from Harvard FCU to help get you on your way to the journey of a lifetime. The Club Savings Account is one popular choice for vacation savings. With a Club account you can arrange for regular deposits to be made via automatic payroll deductions, then get your money automatically transferred at a set date.  

Taxes  

Research shows that in comparison to straight couples, same-sex couples tend to tie the knot later or forgo marriage altogether. In terms of taxes, there may be advantages and disadvantages to remaining unmarried. One-income families tend to benefit from jointly filing as a married couples, whereas couples who bring in roughly equal incomes may may less in taxes when they file separately. If you and your partner own a home, each partner is usually eligible for equal tax deductions on interest, assuming you’re making equal mortgage payments. Need more tax support? Click here for a list of tax terminology and free resources.  

Retirement 

The Pension Rights Center reports that LGBTQ+ Americans are less likely to have access to traditional pensions and may see greater financial insecurity on retirement. Check out retirement savings tips on the Harvard FCU blog, and in particular consider opening an Individual Retirement Account (IRA). Because IRAs are tax-advantaged, you get more bang for your buck than with a normal savings account. Click here to read more about IRAs and Roth IRAs, which offer different tax advantages. And, if you’re nearing retirement and you and your partner are unmarried, keep in mind that certain Social Security benefits may be reserved only for married spouses. If you’re concerned about any issues around inheritance, life insurance, spousal benefits and so on, speak with an estate planning expert.