Published in: Banks | June 11, 2020
By: Dana George
Same-sex couples sometimes face issues that make it tough to get ahead. Here are five tips that can help.
David Rae is an owner of DRM Wealth Management in Los Angeles. He and Ryne Meadors, his husband of six years, are living their best lives. They own a business, are financially successful, and volunteer their time and talents to charities they care about.
In short, this is a happily married couple who have navigated the personal and financial waters of life together. Today, their financial planning business helps other same-sex couples do the same. According to Rae, approximately 60% of his clientele are from the LGBTQ community, and what those clients look for is unsurprising: Money in the bank and financial security.
Rae offered these tips for anyone who is part of a same-sex couple or looking for their life partner:
Some reports do show that men in same-sex marriages can earn more than their straight counterparts, but that's only part of the picture. Rae says there is also a "huge amount of poverty in the gay community." Couples who want to get ahead must learn to save.
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"Someone sat me down at 22 and instilled in me how important it is to save money. I was working as a waiter at the time, and I was only able to put $25 away a month. But it's amazing how it grew and how it got me in the habit of saving," Rae said.
According to Rae, gay couples tend to gravitate to areas of a city where they are welcomed and feel safe. Often, those areas are located in city centers where rents are more expensive. It is essential to be safe, but make sure you also prioritize saving.
"Don't feel the pressure to overspend on housing," Ray said. "If your housing is too expensive, your budget will never line up."
Take the time to find a home you can afford, consider a house-sharing arrangement, or find a dependable renter you can rent out a room to. The ultimate goal is to build your emergency savings fund, invest in your future, and save for retirement while living somewhere that makes you happy.
A 2017 Pew Research Foundation study found that 92% of LGBTQ adults felt more accepted by society than they did just 10 years earlier. In fact, the LGBTQ community is well represented in some of the most impressive executive offices in the country, including Apple, Dow Chemicals, Goldman Sachs, and Land O'Lakes.
However, the reality is that there is no federal law against LGBTQ discrimination, and only 21 states and the District of Columbia offer full protection against discrimination in employment, housing, and public places. That leaves 27 states which have no laws against discrimination practices, and two states -- Wisconsin and Utah -- which offer limited protection. For scores of LGBTQ adults, discrimination can be the difference between just getting by financially and thriving.
Given that employment directly impacts your finances, it is important that both you and your partner outsmart those who might want to keep you down.
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Rae explains, "Make yourself invaluable, build your skill set and expertise. If you work with some troglodyte who doesn't appreciate how lucky they are to have a fabulously gay employee, someone else will love to have you work for them."
"Regardless of sexual orientation, it is rare to work for one company throughout your entire career. Heck, even straight people can have terrible bosses. It may not feel like it now, but your hard work today to improve your skill set will pay off eventually," he finished.
According to Rae, many of his clients have amassed money because they do not have children. While it works out for them right now, being childless during retirement means they are totally on their own. He recommends that all same-sex couples make an extra effort to be ready for retirement when the day comes.
"Overall, planning for retirement is important for all committed couples, whether they are married or unmarried. In some cases, you may have more options to save into things like a Roth IRA as an unmarried couple," Rae said.
"When you are actually retiring, there are many benefits you may miss out on if you are unmarried, things like spousal Social Security benefits and more favorable inheritance rules. I work with several couples who have been together for decades but are not planning to get legally married until they both retire, mostly to avoid many of the marriage penalties in the U.S. tax code."
Rae says that it didn't take long to figure out that he was financially in sync with Meadors. "We had a lot of conversations about finances. Not about being rich or poor, but how we thought about money and where we wanted to go," Rae said.
It is easy to get caught up in the excitement of a relationship and forget that you are in it for the long term. Sharing financial goals is one way to work like a team. And the truth of the matter is, that's a good idea for any couple.
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