As a member of the LGBTQ+ community, you face unique financial challenges when it comes to planning for your family’s future. Whether you’re married or not, have children or not, there are important considerations that can impact your financial well-being. Here are some tips to help you create a financial plan that addresses the specific needs of your LGBTQ+ family:
Start with a Budget
Before you can begin saving and investing for your future, you need to understand where your money is going today. Make a list of all your income sources and expenses, including housing, utilities, food, transportation, entertainment, and any other regular costs. Then, identify areas where you can cut back on spending to free up more money for savings and investments.
Consider Estate Planning
If you’re married, you may assume that your spouse will automatically inherit your assets in the event of your death. However, without a will or estate plan, your assets may be distributed according to state law, which may not align with your wishes. This is especially true if you have children from a previous relationship, or if you’re not legally married. Consider meeting with an estate planning attorney to create a will, power of attorney, and other legal documents that protect your family’s interests.
Maximize Retirement Savings
As an LGBTQ+ individual, you may face challenges when it comes to retirement savings. According to a recent study, LGBTQ+ individuals are less likely to have 401(k) savings than their heterosexual counterparts. Maximize your retirement savings by contributing as much as possible to your employer-sponsored retirement plan, and consider opening an individual retirement account (IRA) to supplement your savings.
Consider Insurance
Insurance is an important part of any financial plan, especially for LGBTQ+ families. Consider purchasing life insurance to provide for your loved ones in the event of your death, and disability insurance to protect your income in the event of an illness or injury that prevents you from working.
Save for Your Children’s Education
If you have children, saving for their education is an important part of your financial plan. Consider opening a 529 college savings plan, which offers tax-free growth and withdrawals when used for qualified education expenses.
Review and Adjust Your Plan Regularly
As your family’s needs and circumstances change, so should your financial plan. Review your plan at least annually, and make adjustments as needed to ensure that you’re on track to achieve your financial goals.
Creating a financial plan for your LGBTQ+ family can be challenging, but it’s an important step in ensuring your family’s financial security. By following these tips, you can create a plan that aligns with your values and supports your family’s goals.
