LGBTQ and Straight Millennials Share Similar Financial Habits

group of friends eating pizza
Shazana Farook

Stressed out about money? Seems like it's a worry on everyone's mind. But one group may be more concerned than others.

Millennials are not only anxious about money, but they experience a higher rate of stress from their finances than other generations do. This, according to a study conducted by the American Psychological Association, shines a light on how money is a top stressor for many Americans. From paying off student loans to budgeting for living expenses such as rent and utilities, many cash-strapped millennials carry a heavy financial burden. The indicated struggles are not just common for millennials who identify as straight, but also for their LGBTQ-identifying cohorts.

TD Ameritrade's LGBTQ and Straight Millennials survey reveals that despite some differences between these groups, saving and investing habits tend to be similar. Approximately half of millennials (51 percent straight, 46 percent LGBTQ) invest in the stock market, 37 percent save towards an emergency fund, and 33 percent save for retirement.

John Ruda, managing director of strategic planning and analytics at TD Ameritrade Institutional, suggests that many millennials may have a stronger desire for financial security due to challenges they have faced during some formidable years in their lives. Ruda points out that many millennials on the older end of the spectrum had to deal with the burden of their college tuition bills during the economic volatility of 2000-2003, and then began to get settled in their careers as a second wave of financial crisis hit from 2007-2009.

Accounting for savings?
Alexa M., a customer service representative from Valley Stream, N.Y., says that moving out after college and landing her first full-time job helped her realize the significance of saving.

"Being on my own has taught me the importance of saving," said Alexa. "Living with my parents, I never had to worry about budgeting for rent, my phone bill or groceries. To ensure I have enough money, I've learned to divide my paycheck in three ways: retirement, emergency fund, and day-to-day expenses," she explained.

Ruda admits that when he travels, he and his husband love to treat themselves to a nice hotel for some rest and relaxation, but his everyday financial habits consist of stretching every dollar.

"When I'm out shopping for things I otherwise need, I always want to find the best deals, he said. "From leveraging in-store sales and coupons, uploading grocery receipts to cash back apps, maximizing credit card points earning, or using cashback shopping portals, a bit of research and planning can pay off and accelerate our ability to save for the future or fund some enriching experiences," he explained.

To help take some of the stress off of straight and LGBTQ millennials, Ruda offers some tips that can help take the weight off their shoulders.

  • Spend less without sacrifice: Explore ways to spend less without foregoing needs or experiences. Use virtual assistants to keep track of items you'll need to buy soon and be opportunistic when you see good prices emerge. Take advantage of cash back apps for online and in-store shopping, and then earn miles and points on your travel and dining to squeeze out even more savings.

  • Strengthen your emergency fund: Take some of your savings and start or add to your emergency fund. When you're not sure what the future holds, you can worry less when you have money on hand to cover six months or more of day-to-day living expenses.

  • Envision and plan your future: While in a lot of ways we're just like everyone else, LGBTQ individuals and couples may have some differences in what our later years look like. Think about it in practical terms like aging well and ensuring access to care (organizations like Sage provide free resources to help understand the facts on LGBTQ aging), while also considering what your leisure activities could look like, then start planning your financial life accordingly.

  • Don't wait: Putting money to work now means you may have more time to generate compounding returns. For example, if you save $1,000 today and your savings and investing strategy returns five percent annually, you could have $4,322 in 30 years. Take five years off that time period and you could have missed out on $936 of that. See for yourself, using this simple calculator.

Image via iStock

TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other’s policies or services.

About the LGBTQ and Straight Millennials Survey. A 15-minute online survey was conducted with 1,519 American adults aged 21 to 37 by Head Solutions Group, between February 21 and March 7, 2018, on behalf of TD Ameritrade Holding Corporation. The statistical margin of error for the total sample of N=1,519 within the target group is +/- 2.5 percent. This means that in 19 out of 20 cases, survey results will differ by no more than 2.5 percentage points in either direction from what would have been obtained by the opinions of all target group members in the United States. Sample was drawn from major regions in proportion to the U.S. Census. Head Solutions Group and TD Ameritrade are separate and unaffiliated and not responsible for each other's services or policies.