LGBTQ+ Money Tips From BECU Employees
(Originally published June 17, 2022) Get personal finance tips from members of the BECU Pride Advocacy Collective group for LGBTQ+ employees, who share the advice they'd give to their younger selves, based on life lessons they've learned through the years.
Budgeting. Saving. Spending. Credit card debt. These money subjects can overwhelm anyone, but they can weigh even more heavily on LGBTQ+ people, especially younger adults, according to the wide-ranging Experian LGBTQ Money Survey.
We asked our BECU Pride Advocacy Collective employee resource group for advice they'd give their younger selves on a few common financial issues identified in the survey. We hope these tips are useful to you, no matter who (or how old) you are.
LGBTQ+ Budgeting and Saving
The survey showed that 44% of LGBTQ+ respondents struggle to maintain adequate savings compared with 38% of the general population. Among people 25 to 34 years old, the numbers were even higher. Around 53% of LGBTQ+ people in that age group reported struggling to maintain savings.
"As a young person, money and budgeting can be overwhelming, and it's incredibly easy to overspend," said Sheldon P., contact center operations. "I remember getting my first paychecks and thinking, 'Why does it all disappear so quickly?'"
Here are some budgeting and saving tips from BECU employees:
Buddy Up for Accountability
"Get an accountability buddy to help you meet your financial goals and needs," suggested Xan B., member consultant lead. "Sticking to a budget can be hard, but by sharing my goals and plans for my budget, I stopped overspending, built my savings for emergencies, and avoided living paycheck to paycheck."
Use a Budgeting App
"Once you get a visual of where your money is going, it's much easier to keep track and make adjustments," Sheldon P. said.
Set Goals, Automate Savings
"Create short-term and long-term goals, and have a savings account for each of those goals," Sheldon P. said. "Think of savings contributions to those goals as similar to a required bill instead of an optional action."
Then, set regular automatic transfers to your savings account (or accounts).
"Don't touch it except if absolutely needed," Sheldon P. said.
Your savings contributions can start small. For example, if you're paid every other week, put $20 per paycheck into savings. Voila! You've got around $520 plus interest by year's end.
Spend With Intention
More than one-third of LGBTQ+ survey respondents said they have spending habits they'd like to improve. Dining out was a significant source of overspending for 46% of all LGBTQ+ respondents. Follow these tips to help reduce spending:
Prioritize, Don't Just Cut
"Make note of the things you enjoy, such as buying clothes or going to a movie, and budget reasonable amounts for those things," Sheldon P. suggested. "I'd tell my younger self to cut back, not cut out. Trying to budget to the extreme and completely cut out everything I loved was never sustainable."
Planning for fun and including it in your budget can prevent splurges that cost you more in the long run.
Being selective about the businesses you buy from can also help control your spending, because it forces you to be thoughtful about where your money is going.
"Where you spend can matter as much as what you spend," said Stephen B., Vice President of Brand Strategy. "Supporting LGBTQ+ businesses is a great way to support the community." He recommends the GSBA annual guide for a great list of options.
"Also, when you can manage it, donating money to causes you care about can be rewarding and even has some financial benefits at tax time."
Track Spending With a Credit Card
Matt W., senior program manager and co-chair of the BECU Pride Advocacy Collective employee resource group, uses a credit card for his discretionary spending.
Matt then monitors card spending using a mobile app, ensuring his card balance doesn't exceed a target spending amount (so he doesn't carry a balance by month's end — which would result in budget-unfriendly interest).
Whatever your spending weakness is, you might be able to enjoy the same experience for less money. If you love live music, maybe discovering new musicians at outdoor markets can save you money on tickets. If new outfits are your weakness, think about ways to scratch your shopping itch for less.
Stephen B. wishes he'd started watching his budget a little earlier in life and wishes he'd discovered thrift shopping earlier, too. But, he said, it's never too late to start both.
LGBTQ+ Tips for Retirement and Beyond
In the survey's ranking of financial concerns among LGBTQ+ respondents, retirement savings concerns topped the list at 29%. If they could do it again, here's what BECU's Pride Advocacy Collective members would tell themselves to do:
Enroll in Your 401(k)
Sheldon P. would tell his younger self to always sign up for an employer's 401(k) program, particularly if his employer matched contributions.
"A 401(k) match is free money your employer is giving you for your retirement — don't leave it on the table," he said. "The power of market returns and compound interest will help you grow your savings."
If you're moving into a new job: "Don't cash out small 401(k) amounts held for shorter periods of time," suggested Jon S., member relationship manager.
"Always merge them into the new 401(k)."
Get a Raise, Raise Your Retirement Contribution
Consider upping your retirement contribution whenever receiving a raise. Several years ago, Matt W. set an automatic increase to his 401(k) contribution percentage that matches any raises.
For example, if anticipating a 2% merit increase, he increases his annual contributions by 2%. If monthly expenses stay consistent, putting more toward retirement won't hurt cash flow.
Think About the Big Picture
Beyond retirement, consider the estate planning process, including your will and arranging for your assets after death.
"As a queer person, it's extremely important to think about estate planning early and visit it often," Matt W. said. "Since laws can change and protections can be challenged, it's important to make sure your loved ones are taken care of the way you want them to be."
LGBTQ+ Debt Tips
Paying off debt ranked second among top financial concerns, listed by 20% of LGBTQ+ respondents. Here are strategies BECU employees used:
Snowball Debt Payment Strategy
Matt W. faced a significant amount of credit card debt in his mid-20s. Then he learned about the "snowball method." With this method, you pay extra toward your smallest debt. After that's paid off, you put more toward your next-largest debt.
"This worked well for me because I felt immediate relief once I got one of my credit cards to a $0 balance," Matt said. "It motivated me to continue, and I'm proud to be debt-free today."
Long ago, Sheldon P. opened too many credit cards and felt overwhelmed. "I wish I had consolidated that debt to one payment with a lower rate," he said. "On one of my credit cards, I paid nearly 30% interest."
After consolidating credit card debt (such as with a low- or zero-interest balance-transfer card), he emphasized the importance of making consistent, monthly, on-time payments.
BECU's financial educators recommend using caution when consolidating debt. It's a great option as long as you can control the spending behavior that got you into debt in the first place. You don't want to make room on a credit card and end up with more debt than you started with.
Stash Credit Cards
If tempted to pull out a credit card due to FOMO (fear of missing out), remember: "Interest charges over a long period can make something cost twice as much," Sheldon P. said. "If the $250 concert tickets become $500 after interest, it's no longer worth it, and you're paying it off long after the concert has ended."
LGBTQ+ Job Tips
About 62% of LGBTQ+ survey respondents experienced financial challenges due to bias, discrimination and laws regarding their sexual orientation or gender identity. These challenges include experiencing discrimination or harassment at work, lower salary or reduced chance of promotion, and being passed over for a job. Finding a supportive workplace could boost your emotional and financial health.
If you don't feel valued by your employer, consider these tips:
Look For a New Job
"Life is better when you can live it authentically, and we spend so much of our lives at work," observed Lisa L., fraud operations support product manager. "If a company doesn't support you as an LGBTQ+ employee, don't settle. Find somewhere you can feel comfortable being who you are because plenty of other employers support their employees. That's the kind of company you want to work for."
Research the Workplace
Research a company's equity and inclusion practices.
Sheldon P. suggested scrolling through a company's social media and checking out the Human Rights Campaign Equality Index.
Stephen B. suggested finding and speaking with people who work for the company or who use the services they provide.
Interview for You
Remember the interview process involves you interviewing the company, too, Jon S. said.
"You can even ask during the interview, 'Does your company have an equity and inclusion program?'" Sheldon P. said. "If an organization practices DEI (diversity, equity and inclusion), they will be proud and open about it."
These tips offer a good start to rethinking money matters. When sorting out your finances, "don't be afraid to ask questions and learn more," Jon S. said. "There's no shame or embarrassment in asking for help and support as you learn to take charge of your financial future."
Whether from a BECU Financial Health Check specialist or another money mentor, you'll learn how to spend, borrow and save smarter.