NerdWallet's Smart Money Podcast - Queer Money Talk

Episode Date: June 30, 2022

LGBTQ+ people face a number of unique personal finance challenges, including higher rates of poverty and a wage gap. As a wave of anti-LGBTQ+ legislation is enacted across the country, how can members of this community protect their money to strengthen their personal resilience?  This episode Sean and Liz talk with David Auten and John Schneider, also known as the Debt Free Guys and hosts of the Queer Money Podcast, about how LGBTQ+ people can improve their personal finances while following their morals. David and John also talk about their experience paying off credit card debt. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [e-mail]. Like what you hear? Please leave us a review and tell a friend.

Welcome to the NerdWallet Smart Money Podcast. I'm Sean Piles. And I'm Liz Weston. To send the nerds your money questions, leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD. You can also send your voice memos to podcast at nerdwallet.com. And do yourself a favor and follow us wherever you get your podcasts to make sure that you never miss an episode. And if you like what you hear, please leave us a review and tell a friend. This episode, we are talking about what it means to manage your money when you are of the LGBTQ plus persuasion. And joining us in this conversation are David Otten and John Schneider, also known as the Debt Free Guys and hosts of the Queer Money Podcast. Welcome on to Smart Money, you two.

Thank you so much for having us. We're excited to be here. Yes, thank you. Great. Can you guys say who each of you are so our listeners know whose voice is whose? Hello, this is David. Hello, this is John. All right. Before we get into this conversation, I think it's important to set some context for the struggles facing LGBTQ plus people right now. Across the country, queer people are paid less than typical workers, according to a report from the Human Rights Campaign. And this wage gap is worse for queer

people of color and transgender and gender non-conforming people. We are also seeing a wave of homophobic and transphobic legislation in state legislatures. And to top it off, queer Americans are more likely to live in poverty than cisgender straight Americans. So this is all to say money and just life is tough for a lot of queer individuals. And the challenges aren't necessarily spread equally across our community. You guys provide great LGBTQ plus oriented financial guidance on your podcast. How do you think about the difficulties of giving personal finance advice to folks who are confronting a lot of systemic challenges? That is one of the

interesting questions that I think many people who assume that there aren't any differences forget, is that there are systemic challenges that our community has faced for quite a long time. And so that means that for a lot of the advice that we're giving, we're not only having to go through kind of the transactional and habitual advice that helps folks improve their finances, but we also have to talk a lot about the mindset of why it's important for our community to do these kinds of things, rather than maybe saying, I'm just going to live for today because who knows what life is going to be like a month, a year, five, 10 years from now, which is what I think a lot of folks in our community have kind of gotten used to doing is enjoying life because they have felt like life for them is much shorter term. And so

we need to talk about why there are some of these systemic challenges, what they are, how do we overcome them, and what that has done to us mentally that may be holding us back ourselves, but also the discrimination side of it, how we can confront that. To your point about people wanting to live for today, I think many people in our community may feel like the financial industry is discriminatory and not for them. So why bother engaging with it or investing because it's something that's going to be potentially used against them to curb their rights? Exactly. This is John. I think this is a historical challenge that our community has faced. When you couple that with the dearth of

representation of LGBTQ people in financial marketing and collateral advertising and whatnot, it almost seems like that's a product and a privilege sort of created for somebody other than me. I don't identify with that. I don't want to be the straight white couple walking down the beach with a golden retriever. That's not my definition of an exciting retirement, yet that's on the cover of every financial advisor's brochure for their products and services. And I can't identify with that. It's almost as if the industry has given off this air of not being interested in engaging with me. Therefore, because I don't identify with anything, not only am I not going to do it because you're not reaching out to me, I'm somewhat angry that you're not connecting with

me. And so it's almost like this cut off my nose despite my face, so to speak, because I don't identify with it and that somewhat frustrates me. So I'm just going to ignore it up until the time that it becomes a critical situation. And then unfortunately, we get a lot of communication from folks when it reaches that critical point. That's when they're ready to do something and they want whatever help they can get. But of course, then it's probably can't get any more challenging. Well, folks are disengaged from certain financial services and they're also facing discrimination. And a lot of people in the LGBTQ community are living in poverty. And so it's hard to even have the resources to know how to sort out what the best thing to do with your money is. community live at or below the poverty line, which in a sense almost automatically excludes folks from financial services, right? Financial services companies in general are chasing after people who can deposit a lot of money, people who can invest a lot of money, people who are ready to really

move forward with their finances in a big way because that's where they make their money. And at the same time, I think there has been a lot of, with the financial services industry, companies that have been just checking the boxes to try to say that they support the LGBT community. When they're not actually truly looking at the true needs of LGBT folks, especially trans folks, they're not truly looking at the needs and figuring out how do they create products and services or messaging that truly is engaging and in a sense does attract us into working with companies like that. In a sense, we hear a lot of talk about rainbow washing or pink washing. And then some of that does come from this feeling like the only time companies show up for us is in the month of June. Otherwise, we are an afterthought, right? And they don't remember that we still are investing July through

May. We still are using our credit cards and debit cards July through May. We're still buying homes July through May, right? We are there all the other times of the year. Don't try to get us to marry you on the first date. Yeah. I'll add to that. David and I in 2019 did our Queer Money Live tour and we went to a couple of LGBTQ centers where they told us that they have had advisors from different firms go in and put on money talks or money education to get the discussion started about financial independence and financial security. But the conversation or the presentation very quickly tacked to a strategy to try to open new accounts and increase their assets under management. And to David's point, we have a whole history of being either consciously or unconsciously excluded from the financial services, financial independence discussion. You can't assume going into and putting on one talk to a group of LGBTQ people

that after 15 minutes of talking about financial independence and investing, that they're going to open up accounts and start depositing funds for you. It's going to be a slow dating process if you really want to engage the community in an authentic way. I think there's a really healthy amount of duly earned cynicism against financial services companies in the LGBTQ plus community because of this history that we have. So I try to give personal finance advice, which is our bread and butter at NerdWallet, and then acknowledging that there are these huge structural things that no one person, no one personal finance hack is going to bridge. It's a matter of, for me,

focusing on what you can control and the progress that's being made, and then also holding people accountable where you can. So one thing that has been kind of positive news on this front, the three credit bureaus, Experian, TransUnion, and Equifax now allow transgender and non-binary folks to change their first and middle names on their credit reports to reflect a legal name change that can help people affirm their identities and ensure that their dead names are not being disclosed. But at the same time around holding people accountable and companies accountable, I try to avoid companies that support politicians that advocate against my rights. This is David. I will agree with that.

Unfortunately, what we can see happen is that in large corporations, oftentimes there isn't a coherent, clear intention on what the company is doing. You might have a legislative office within one of these massive corporations that has people off working on one type of legislation and another that's supportive of a completely different type of legislation and they never talk to each other and don't realize that what they're actually doing is they are supporting two completely opposing viewpoints and that's's unfortunately the truth about corporations. And I think that's important for us to step up and say, you do need to be aware.

Think about what you're doing. Be aware of what your organization's message truly is to the community. Because if you're not going to be supportive of the community in a more holistic manner, then why do you support us? Right. And so we do have to challenge them and say, please do a better job. But we also, I think, as a community need to understand that it's not always just one person making that decision. And so when we do see a company being supportive, we have to champion that support. I oftentimes think about during this time of the year, there is a lot of attack about pink washing

and rainbow washing. But when that attack happens, we're oftentimes not critically thinking about the fact that many of these companies are financing and supporting the organizations that many people must rely on, like the Trevor Project, like our local LGBT centers. All of these organizations, much of them do rely on corporate dollars to be able to run. So we need to be careful we're not biting the hand that feeds to the point that the hand no longer feeds. Yeah, no, I totally agree with that because it reminds me of this issue that happened on Twitter where, of course, there is a certain lack of nuanced conversation sometimes. And there is an LGBT-focused bank that recently came out, and there was this whole swath of kind of queer Twitter that was dunking on them, saying, how dare you try to appropriate my culture and say that you're catering to me, when in fact this company, as far as I could tell from what I looked into, was earnestly and still is earnestly trying to provide a queer banking platform for people.

So it kind of rubs me the wrong way when I see people being almost overly cynical, where you're right, we do need to appreciate the small wins where we have them. Yeah, this is John. I think we need to have a healthier sense of skepticism, maybe not necessarily be so cynical. We can be as cynical as we want to be and continue to avoid using the products and services that can help us reach financial independence. But then we can't continue to complain that there is a sexual orientation

and gender identity pay gap. We can't continue to complain that a larger percentage of LGBTQ people are struggling financially relative to the general population. We might not necessarily like that we live in a capitalistic society, but it's where we live.

And you want to try to use that to your advantage, at least to the point where you can actually then affect real change. Yeah. Well, we've been talking about some pretty big issues and structures that make managing your finances as a queer person difficult. I'd love to hear from your personal experience, whether you too have faced any unique obstacles managing your finances as a gay couple. This is John. I don't know that David and I have faced any unique obstacles managing your finances as a gay couple? This is John. I don't know that David and I have faced any unique obstacles as a gay couple. I think I'm going

to acknowledge that we're cis white gay men. So we're kind of at the top of the privilege spectrum there in the LGBTQ community. I think what is unique for David and me is that we've had the experience of being both inside the industry and outside the industry. And despite being inside the industry, we were still abysmal with our finances at one point because of and we acknowledge it and can understand it from the outside. So I think that is something unique for David and me. Well, part of your journey was paying off over $50,000 in credit card debt. How do you think that debt was connected to your lives as gay men. Yeah, this is David. And I'll tie this back to the kind of the carpe diem, let's live for today, for tomorrow, we may die feeling that has permeated our community for such a long time period. John and I do think that this is in part a hangover from the HIV AIDS epidemic and how truly many folks during that time period were seeing friends dying and saying to themselves they wanted to live out their best life in whatever amount of time that they had.

And I think that caused a lot of us to live our lives to a level of excess. I don't think that the community has let go of that. And John and I, I think, fell susceptible to that. And kind of the foundation behind that is we both came from times and places and families where it wasn't okay to be gay. And so we knew that when we finally got out on our own and could be our true selves, that we wanted to feel good about ourselves. And one of the best ways to feel good about ourselves was, especially in the country we live in today, is to show other people that I'm doing really, really well. So we acquired the things that prove to everyone I'm doing really, really well, whether that was clothing or vacations or things like that. And there is this kind of expectation that if you want to be the right kind of gay man, you need to look and act and be and do all these certain things. And then we will accept you as a

part of our community or our, so to speak, clique, right, within the community. And John and I, we fell susceptible to that. I mean, that was part of the reason why we acquired that $50,000 in credit card debt was because we were trying to keep up with Mr. and Mr. Jones in our community. Even though we were doing okay financially, we just felt like we had to live up to some unrealistic expectation. I think a lot of people still feel that, that you have to get the new aesthetic. Even though fast fashion is kind of looked down upon nowadays, I think people still want to get the latest trend,

buy the newest thing, go on a vacation to Fire Island or wherever it may be, Mykonos, so that they can say, I'm a gay person in this gay space and look at me living a fabulous life. And it can be hard to break free of that and say, actually, what's more empowering is living a life that is sustainable and financially sound, even if it isn't as flashy on social media. This is David again. I think that's the important point. John and I acquired our debt back in the early 2000s. And today, even more so, there's this push to show who you are, how great your life is on social media, whether it's Facebook, Instagram, TikTok. All of these platforms now are kind of even more of a microscope to look

at someone and say, their life is just as good as if not better than mine, I need to do more to make mine look as just as good if not better than theirs. And it becomes this kind of this one upmanship in the community that can really hurt us financially. Yeah. So much of it as well is also curating your digital image. And so many of the parts that go into that are having experiences that are aesthetically pleasing. And that gets very expensive. But then there becomes a point where you have to pay up. And you guys had that moment.

Can you talk about when you decided to get out of debt? Sure. This is David again. Actually, that moment came from us wanting to truly live even more excessively. If you can imagine it. We were in the mountains of Colorado visiting a friend of John's and his girlfriend. Although we'd been to Winter Park, Colorado before, it was this kind of perfect storm of us being there, being around friends and realizing everything that the town had to offer. And we said, this is the perfect place for us to have a vacation home. So we stopped at a realtor's office to look at property on our way out of town on Sunday and hopped in the car. And

we were having this, and I think a lot of us do have these kind of fantasy conversations of what it was going to be like for us to buy land and build this vacation home, the perfect place for us to get away from the city and relax and to invite our friends and family and let them use it. And, you know, just kind of this really amazing, fun, fun conversation. But we were driving down the road at 65, 75 miles an hour. And I don't know which one of us asked the question, how are we going to do this? Or in a sense asked, what can we afford? What we realized as we pulled up in front of our home was we really can't even afford to go up there on vacation over the weekend. What are we doing up there? And we opened up the door to our home and we walked down a flight of

stairs into a basement apartment. Now I'm talking about a basement apartment where you have little tiny windows where you see out, not some of the walkout places like you have in New York or San Francisco. I mean, we literally were physically and financially, we were living in a hole. And it was at that point that John and I confessed to each other. That was one of the first times we had a true, here's our finances conversation. And that's when we confessed to each other that we had $51,000 in credit card debt. It can be so easy to continue to live this fantasy life. And it's interesting in a way that as you went down that mountain and the air became a little bit less thin and you could think maybe clearly again, you began to realize what was going on in your lives in a very true sense. I've never attributed to the oxygen.

That's the first thing that I thought of. Maybe there's something going on there at a chemical level. I like it. It makes a lot of sense. It's all about the science. You guys mentioned that you were in finance originally. What jobs do you have? When this revelation happened to you? So at the time that David and I confessed that we had $51,000 in credit card debt between the two of us, I was doing supervision or a form of compliance for a financial services firm. What were you doing, sir?

I had moved away from the brokerage side and onto the platform development side. So I was actually moving towards tech. But I had experience of working with clients and working with individuals and giving all of the advice about, well, you should be putting this much money away for your retirement and you need to be putting this much money away for your kids' education. And all of those kinds of conversations were things that I had over and over again. And a lot of times I was working with individuals who were also working with financial advisors and there was a three-way conversation. So I was not only hearing it, but I was saying it. So it kind of maybe tells you what's going on inside of my head, or at least was back then, because not a whole lot was connecting with what I was saying and what I was hearing.

So we had all of the theoretical knowledge, and we were giving it and espousing it. It was the actions that we weren't taking. And I don't think you guys are at all unique in that. I think there are a lot of people in the financial services industry that need to walk the talk as well as talking the talk. A hundred percent. One of the things I used to do in compliance was to review the ADVs and the credit scores and do background checks on advisors before we bring them on the platform. And I'm still shocked. So you would be shocked at the number of advisors who have filed for bankruptcies, had liens who we couldn't platform because they weren't

fiscally responsible or didn't have good credit score themselves. So we weren't anomalies in the industry. You guys also have three main pillars of your LGBTQ plus oriented financial philosophy. One is pay off credit card debt, which is really important. Another is becoming a part or full-time entrepreneur. And the third is save and invest for retirement. Can you talk about how you came to establish these three priorities? Absolutely. So when we were almost done paying off our credit card debt, we thought that between our personal experience of dealing with the debt and with our professional experience

of being in finance, that we had a sort of a unique perspective and voice that we could provide and help people with a problem that many Americans have today. And so we thought we were going to write a book. And then when we realized that we needed a platform before we could actually publish a book, that was when we got into blogging. And the first time we went to FinCon, which is a personal finance conference, we realized that there are all these different niches that people were speaking to. So you have your mommy bloggers and your military families and your Christian bloggers, and they're all speaking about personal finance, their specific niche. And we were there, we realized, and some

people had told us that nobody was speaking to our community. We were the only, at that point in time, only LGBTQ people at that conference. And so we decided to go back and think about, okay, well, how can we double down and help our community more since obviously we're a part of that community and it needs help? And we realized in doing some research that we weren't unique in our financial situation. One of the most common challenges that our community has, even despite all the student loan debt that folks have, is credit card debt. And because of the astronomical rates in credit card interest rates, we said, you know, that's one of the monumental things that our

community needs to tackle first, because you're just throwing money out the doors. It doesn't even have as good an ROI as student loan debt. So because that was our story and from everything that we've researched, both anecdotally and from studies done, that's why we focused on credit card debt first. And then one of the other key pieces of communication we get back from our community is unfortunately, like I said earlier, very often people will come to us when they decided they wanted to retire yesterday. And that's a reoccurring problem for our community. So we thought, well, obviously we need to tackle that because not only do you lower your cost of living with paying off your credit card debt, but then if you can focus

on and build some retirement savings and you reduce your financial anxiety, you increase your financial security, that has all sorts of benefits for you. And then in our experience and from people that we've talked to who are entrepreneurs, whether they're full or part-time, we found that achieving both of those goals of paying off credit card debt and improving your retirement security are usually much more easily achieved if you can subsidize that with a full or part-time business of your own. I'll throw in that starting off with paying off credit card debt is probably the place that most people skip over when they think about improving their life financially. They think about increasing their income. And from my personal experience,

when I got my first full-time job, I was making $17,000 a year. Nine years later, I was making $34,000. My income doubled. My credit card debt went from $2,000 to $14,000. So it went up seven fold. So it isn't just making more money that's going to solve your debt problem. And that's why we talk about focusing on credit card debt first, if you have it, because while you're paying off your credit card debt, if you're doing it through a methodical process, then you're creating habits that will stick with you or should stick with you for the rest of your life that will help you save and invest. And as you save and invest, you start to take off some financial stress. When that financial stress is gone, you can then start

to look at ways that you can actually really expedite your ability to make money with a part-time or full-time business of your own. It's a slow way to getting to what people want, but it also is the way that we think it should be done so that you don't get trapped in the lifestyle spiral upwards just because you're making more money. We know people that we've talked to that have six-figure jobs, living in a high-rise in Manhattan, but also have six figures in credit card debt. Yeah. And what's interesting is that you described your moment where you both came to each other and realized we need to change our lives dramatically. And I'm wondering whether it will always take a certain moment like that for individuals to decide to turn around their financial lives and

get out of credit card debt, or what does it take? Because sometimes carrying this debt, paying it off month after month, year after year can become so normalized that people don't really think about its broader impact because it's just another thing that they're paying for regularly. Well, and we're normalizing it even more right now because all these products or services are offering four easy payments. And so we're normalizing it even more and we're financing everything, right? When we were kids, the idea that you would have to buy a new phone every year was unheard of, but now you have to buy a new phone every year. And I don't know who can afford to buy a new

phone every year without having to finance it in some way. But that's a challenging question because we know very few people who have been able to completely change their financial situation around without reaching some sort of trigger moment. It doesn't always necessarily have to be as dramatic as ours. For some people, it has to be even more dramatic. I don't think that there's an easy answer to that question, unfortunately. I would love to say that it was possible without a trigger moment, but I haven't really seen that. Yeah. This is David. I use an analogy on another podcast of the proverbial ostrich stick its head in the sand, right? We know that they don't actually do this in real life, but when you

think about it, if an ostrich or anything sticks its head in the sand, one of two things happen. One, it eventually pulls its head out and looks around and says, oh, this is where I'm at. I need to breathe. And that's when some sort of change will happen. Or we keep our head underground and eventually something tragic happens. And that tragic thing oftentimes then forces someone to make the change. So David, John, what would your advice be for queer people who are looking to make the most of their money? This is David. My first piece of advice would be to think about what you truly want your life to look like, not what you think that the community or your family wants your life

to look like, but truly what do you want your life to look like? And then figure out how to architect a life like that. And using the financial services and tools, study after study after study about LGBT folks shows that almost across the board, all of the financial tools that are available, we use much less than the general population. And so I think we're going to have to kind of just pull up our big girl pants and say, hey, I'm going to move forward with this no matter what. This is more beneficial for me to be sustainable financially than it is for me to end up having to rely on the community or the government to take care of me at the end of my life. This is John. I will agree with David as that would be my number one recommendation, but I would like to take it a little bit deeper. And that is the why behind why that's important.

And the reason why we have the Queer Money Podcast and do what we do is that we believe that in order to be a truly strong community of LGBTQ folks, it starts with the individual and it also includes your financial security. The stronger we are as individuals financially, the stronger we are as a community financially, and the more time, money, and resources that we have that we can affect true change, support the politicians and the organizations that can continue to push for our rights and look for other means to support progress that we so desperately still need. Well, thank you both so much for talking with us today. Thank you for having us. We appreciate it. And that's all we have for this episode. This week's episode was produced by Sean

Piles and myself. Sean edited our audio. Do you have a money question of your own? Turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com. Also visit nerdwallet.com slash podcast for more info on this episode. And remember to follow, rate, and review us wherever you're getting this podcast. And here is our brief disclaimer, thoughtfully crafted by NerdWallet's legal team. Your questions are answered by knowledgeable and talented finance writers, but we are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply

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