Q&A With Debt Free Guys: Navigating LGBTQ Financial Challenges

John Schneider and David Auten — also known as the Debt Free Guys — are personal finance authors and speakers who run a blog and host a podcast called Queer Money.

Back in 2017, the couple shared with us how they tackled their combined debt. Today the two are still debt-free and working toward new financial goals, like saving up for a comfortable retirement, while continuing to help other LGBTQ individuals improve their finances. They even hosted their first tour, the Queer Money Live Tour, in several cities around the U.S. last year.

To highlight some of the financial hurdles that are specific to the LGBTQ community, we asked Schneider and Auten to share their perspectives and tips for navigating them. (This transcript was lightly edited for clarity and length.)

Any updates since you shared your debt-free story with us?

Schneider: We’re still debt-free, and our financial goals have changed. We’re focused right now on three things: saving for a comfortable retirement, traveling more once we can start traveling again, and giving more of our time and money to LGBTQ organizations.

You often write about being 'fabulously broke.' What does that mean?

Schneider: It’s essentially getting into debt from spending money frivolously to live up to the expectations of the LGBTQ community. The main drivers are competition and a lack of self-worth. For us, we were never the “elite” gays, but we always wanted to be. We went to expensive happy hours and special events. There are different ways of being “fabulously broke.” Last summer we met a drag performer who had just purchased a pair of Manolo Blahnik boots even though they didn’t have a steady income — just so they could look good when they performed. One couple we are coaching to get out of debt was spending a lot on birthday parties for their kids. When we dug deeper into why they were spending so much, it turned out they saw straight parents doing that and wanted to feel that they were good enough parents.

Auten: The media often portrays gay men as being fabulous jet-setters, but that’s a small minority. The rest get left behind or dragged into wanting to be a part of that lifestyle. That’s how we end up being “fabulously broke.”

Which money question do you often get from LGBTQ individuals?

Schneider: We often get asked about how to get a partner on the same page financially. In many instances, when someone in a LGBTQ relationship has their financial act together, the other person doesn’t. That’s a big challenge that affects our community. Not to overgeneralize, but in most hetero relationships there is a sequence of events that couples go through (getting married, having children, etc.) which prompts discussions about finances. When LGBTQ couples don’t go through those events, they don’t necessarily have those conversations.

Can you share other financial challenges impacting the LGBTQ community?

Schneider: Aside from the competition and lack of self-worth that makes them go into debt, there are systemic challenges. Prudential did a 2016/2017 study that revealed a sexual orientation pay gap similar to the gender pay gap. In addition to that, there are many states in the country where you can be denied housing or other services because of being LGBTQ. Some states [like Kansas, Oklahoma and Texas] have enacted laws to make it harder and more expensive for LGBTQ people and same-sex couples to adopt children. If you’re earning less than your peers, it’s hard to save more in your emergency fund and even harder to save for retirement. In fact, a leading concern in our community is saving for retirement because so few of us do it adequately.

Auten: “Cascading homophobia” is a term we use to describe what we think is still happening in America. It’s one of the reasons why we’re not seeing the kinds of progress we would expect when it comes to promotions and upward mobility in the business world. When you look across corporate America, most leadership is white, conservative, Christian and hetero. This trickles down to individuals that have the ability to help LGBTQ people move up. Of course, this isn’t just happening in the LGBTQ community. This is also part of the systemic issues faced by African American and other minority communities.

What advice would you give to someone trying to navigate these issues?

Auten: Seek out resources. There are more LGBTQ voices creeping into the financial space, so find a voice that resonates with you. No matter what age you are, try to participate in your employer-sponsored retirement plan. If you don’t have access to one of those, you have to take on the mantle yourself. You must invest, whether it’s through Acorns, Betterment or another investing tool, even if you can only put in $10 a week. If you’re older, you may have to cut down on spending to set aside more for retirement.

Schneider: It’s important to know what your goals are and have more clarity around what is important to you. When we had $51,000 in credit card debt, we realized that we looked happy on paper but weren’t actually happy. Don’t live up to someone else’s expectations. Align your spending with your values.

Where have you seen the most progress?

Auten: One of the biggest benefits has been marriage equality, which allows couples to work together to create a financial future. This includes passing on money (through inheritance), lowering annual taxes (if they have vastly different incomes) and using their combined incomes as leverage when applying for mortgage loans and investments. That wasn’t the case before marriage equality, and I would say it’s part of the reason why so many couples couldn’t get on the same page financially.

Couples who had been living together for 10 years before marriage equality were now figuring out how to combine finances and didn’t know how to do it. Before marriage equality there were additional costs to combine assets for legal protections (e.g., paying for trusts and wills to be drawn up). Although combining assets has been at the heart of marriage (for hetero couples) for centuries, it wasn’t as natural for LGTBQ couples, who had been operating their finances separately for many years.

Where do we still have a long way to go?

Schneider: There still aren’t enough LGBTQ people in C-suite positions. How many gay, lesbian or transgender CEOs can you think of? This is also the discrimination that the African American community is dealing with. Companies might be hiring more of us, but their boards are still mostly straight white men.

Auten: States are also rolling back protections and making things more difficult. Depending on your LGBTQ status, you can be fired in certain states for getting married to a same-sex partner. Why is that legal? Why can I get married legally but my boss can fire me because of it? That builds a fear in individuals around telling a story of who they are. We know people who don’t tell their financial advisors who their partners are because they don’t want their town to know. How can a financial advisor plan for that individual when they don’t understand half the equation? How do they appropriately file for taxes or Social Security benefits?

[Editor's note: On June 15, 2020, the U.S. Supreme Court ruled that LGBTQ employment discrimination is prohibited under federal civil rights law.]

What else should LGBTQ individuals keep in mind?

Auten: When it comes to systemic issues, it’s important to voice what is happening and raise awareness. It’s important to share experiences in places where they might resonate with others. Right now, in terms of institutional discrimination, the country is focused on Black Lives Matter, which makes complete sense. I don’t know if people can handle both that movement and LGBTQ issues at the same time; our country may not be ready to look into the mirror.

Schneider: The more financially secure we are as individuals, the stronger we are as a community — and the more time and money we have to donate to LGBTQ causes. We can only do that if we have financial independence.