The COVID-19 quarantine, which now, perhaps, connotes to be known as a period of extended doldrums for gender transitioning adults across America, has produced its share of coping mechanisms. On March 18, governors began exploring lockdown mandates. After that initial wave, Facebook posters on the Transitioning with Ease group message board started to feel a little unease.
For many group members, the mad scramble to book appointments before the big freeze on transgender health care services had already started to produce roadblocks. Conversations dovetailed into long missives about afternoon YouTube makeup tutorial binges, estrogen stockpiles and primrose oil DHT blockers. Ironically, it may be easier to plan for a gender transition during an economic downturn since it allows many individuals the opportunity to design the finer details in an already complex process.
Autostraddle caught up with two financial advisers who serve transgender clients, Timothy LaPean and Hans Heath. We conducted separate conversations as they reflect on lessons learned and a year filled with uncertainty and immense change.
A little backstory: Not long after working at Ameriprise, LaPean began drumming up support for Thoughtful Financial Planning in 2014. The Minneapolis-based service arrived out of his frustrations with being an openly gay man in a cutthroat industry. Thoughtful Financial Planning was the friendly olive branch for disenfranchised members of the LGBTQ+ community.
“I wanted to be one person at home and at work. I wanted to bring that integrity into my practice,” he said in an interview with ThinkAdvisor.com.
Like LaPean, Heath was frustrated with the lack of representation in the financial services industry. Heath is a co-founder of LGBT Financial, a financial services firm specifically dedicated to serving the LGBTQ+ community.”Full disclosure: The writer of this article originally was introduced to Heath via a transgender activist while doing research for another project. Heath has been doing LGBT advocacy work for nearly a decade. They have facilitated workshops, advocated for policy changes within insurance companies, and given countless presentations in community outreach programs.
The following separate interviews have been condensed and edited for brevity. The opinions expressed during this interview herein contain broad generalizations and do not constitute financial advice in the strictest sense for the individual reader. For best money management practices, professionals recommend that you consult with experts in one-on-one settings.
Autostraddle: Let’s get into some specific scenarios. If a person has an economic stimulus check, tax refunds and a transgender surgery grant for $6000, how might you advise that person to start micromanaging their money and effectively setting up surgeries outside of quarantine?
Hans Heath: It’s tough to generalize the trans experience. Assuming that all basic needs are met, I’d put your economic stimulus check in your savings. Depending on your timeline, you could potentially look at investing. There are a lot of different factors involved. Do you currently have enough liquid savings to float you in case of an emergency. How much debt do you have? These are all questions that a person needs to ask. As far as the stimulus check goes, you need to put that in a place where it’s most useful to you.
Timothy LaPean: Of course, I don’t know the overarching rules of the grant committee. I would work on getting that money out of sight, out of mind. That way, you can do whatever it is you want to do. It’s all about what matters to that person individually. There’s such a broad spectrum of trans experiences. For me, the most important thing is to get it in an online savings account. Don’t put it where you would typically bank. That way, the money doesn’t get accidentally spent on something else. Right now, it’s a bit tough because things aren’t moving forward in health care while we’re locked down.
In my experience, my friends like to cut it in half. Half of the money goes into the savings account with necessary living expenses in the checking account for the other half. Does that make sense to you as a financial adviser?
Timothy LaPean: When people get a windfall, I usually tell them to spend two or three weeks brainstorming everything that they could do with it. Once they’ve done that process, make a list of everything. Figure out what percentage of it needs to be for short-term stuff right now versus medium-term and long-term goals. As an example, you could spend 25 percent of it on things right now because things are tough. I’m going to spend 25 percent of it on medium-term goals and the remaining 50 percent on long-term goals.
LaPean mentioned lists. If a person is trying to get organized during this period of tremendous economic upheaval, would you have tips?
Hans Heath: When I help my clients get organized, I provide them with financial planning software. It logs every item they have from a financial planning standpoint. It keeps everything under one roof. You don’t need to have software to do this. You can do it in a Microsoft Excel spreadsheet or a notebook. If you’re transitioning medically, you can open up Excel and create a timeline for everything you need. Even if it shows you uncomfortable truths, data is your friend. You need to keep notes of who said what and what they said. A documented timeline will help you make sure that you don’t let anything slip through the cracks. If you want to get nerdy about it, you can look into project management software to help you manage every step of the process.
Of course, $6000 isn’t a lot for most extensive transgender procedures. If your client has a lower amount in that ballpark, do they have low-end surgeries that they address?
Timothy LaPean: I’d recommend brainstorming a list of any and all procedures you might want. Don’t edit it at all. Once you’ve spent two to three weeks coming up with a comprehensive list, then research the prices and recovery timeframes. Recovery from some procedures can be tough and can take longer than people initially want to prepare for. Think about how much time you’d need to take off from work. Work toward a prioritized list that shows both financial and time off costs. Have that list in your back pocket or put it on your phone. That way, when opportunities arise, you can pull out your phone and see what fits the amount of time. It’s a real-time decision-making aid and it’s much easier for your brain than trying to keep track of these multiple factors in your head.
Mutual aid has been significant for people. I know that unemployment offices are overburdened with outdated technology. Meanwhile, Trump’s paychecks have been slow to arrive. LGBTQ+ individuals on my Twitter account have received donations from celebrities through Venmo. If a person is getting $50 gifts every two days, how much money would you set aside for surgery planning?
Timothy LaPean: When you’ve got money coming in like that, make sure you have a way to put it automatically aside. Automatically put it in another account, so it doesn’t get blended with your spending money. I know that people sometimes don’t have that kind of economic stability. I’m a big fan of keeping your money separate for separate purposes. I would open an online savings account. When the money comes in, send it right over to an online savings account. You don’t interact with it a lot, and you have to go through extra steps to spend that money. If you leave money sitting in your checking account, in my experience, it mostly evaporates.
Earlier in the conversation, you mentioned investing. What’s a good rule of thumb about investing during an economic downturn?
Hans Heath: First of all, I’m no fortune teller. I can’t tell you what the market is going to do on any given day. We can look at the historical market implications and make some educated guesses about where it’s going in the future. If you have a considerable surgery expense in your future, you can work with a professional to hit that number. Let’s assume you need $6000 for surgery in a year-and-a-half or two years. You could work with a financial professional to determine your risk tolerance. You could work together to come up with an investment and savings plan to make sure you have that $6000 in two years. You have a few options when paying for a medical transition. Assuming you want surgery and you have capital, you can pay out-of-pocket. If it isn’t possible, you can take on debt or crowd-source. You can coordinate with employers or insurance companies. Finally, you can apply for grants. Debt is not ideal, but I understand that if surgery is what you need to survive and you have no other options, that’s the option you’re going to take. Life is a little messier than the models we draw up, and that’s okay. I generally recommend exhausting all other avenues before you take on debt. Outside of asking friends or relatives for money, I’d look at organizations like Genderbands. They are a non-profit whose mission is to help people by providing free binders and assistance with top surgery to folks who wouldn’t be able to afford it otherwise. I think the bottom line is you should identify the most available streams of capital to help you pay for your gender transition.
That brings me to the next question. If a person has less than $10,000 worth of medical debt, how would you advise that person moving forward with gender transition planning during quarantine?
Hans Heath: How much do you need the surgery for your survival? It comes down to that question. It’s kind of a delicate dance where we play with your balance sheet. We want to keep your debt as low as possible. We want to keep your investments growing if you have them. At the same time, we want you to be happy for the entire ride. It’s challenging for me to say that you should do this in a specific situation. I’d usually want to sit down with someone and have a full conversation. As far as thoughts to guide that conversation, it involves getting clear with your balance sheet and taking a close look. If you have $8000 worth of debt, top surgery would typically cost $4000. In the meantime, what are the alternatives that would increase your gender euphoria? For many folks, the surgery is essential, life-saving, and necessary. On the flip side, for many, it’s not. There’s never a one-size-fits-all approach. A qualified and knowledgeable mental health professional should help you address some of these questions. From a financial standpoint, I focus on survival. That’s my first order of the day. I encourage my clients to focus on that.
Timothy LaPean: In looking at a person’s debt situation, I look at the debts concerning how much money they make and whether or not they should consider filing bankruptcy. Of course, filing bankruptcy will ruin your credit score. The next step is to consider consumer credit counseling. You need to find an accredited provider. They essentially negotiate for you to get lower interest rates. You make one payment a month to the credit counseling agency, and they split it up. That can also damage your credit rating, but it’s not as bad as filing bankruptcy. The next step up from that, I employ classic strategies on how to improve your credit rating. You can look at a bank that offers a secured credit card that has a relatively cheap annual fee. You can use that to build credit, pay them $300 and they can put it in a savings account. They give you a credit card against that. Find a cheap bill that needs to be paid every month, set it up on the credit card, and auto-pay from your checking account. Do not spend a third of the credit limit. The other thing to look for is a credit builder loan, and these are sometimes hard to find. Depending on where you live, organizations will have money coaching as a service, and they might have classes on budgeting. Right now, a lot of debtors are deferring things for people without damaging credit scores. You want to be careful about what the terms of that might be. Of course, you will still eventually have to pay it. A lot of people currently can defer credit cards, mortgages, or student loans for three months or so.
There’s another common scenario I’d like to get your thoughts on. In my social media research, I run across trans women planning a gender transition while living with HIV. If a person has an insurance assistance program like Ryan White, it’s sometimes difficult to work out of cyclical poverty. I see people on social media all the time who can’t move forward because they’re on the hook for expensive HIV medications. How would you help a person plan for a gender transition in this situation?
Timothy LaPean: I live in a generous state. Minnesota has a pretty comprehensive Medicaid program. For those that can work, what’s profitable work you can do in a supportive environment? You work with the person’s talent and see what we can find. I sometimes talk with people about how to speak with their employers. I had a client job-hunting in the middle of a name change. I talked about the pros and cons of that. If you’re transitioning on a job hunt, it’s helpful to know the name you might be using long-term. I usually try to get into the details of people’s questions in a fairly specific way.
Hans Heath: The Ryan White program is administered on a state-by-state basis. There could be some intricacies that are state-specific. Typically, the Ryan White program is for folks who are under an income threshold. I would encourage anyone who is reading this to take a close look at their situation with a financial professional. I’m not saying, ‘Hey, everyone should do this thing.’ It’s specific to the individual. If you have a change in income, that changes things. If you inherit money, that changes things. There are a lot of variables when it comes to working with any government-sponsored program. You would want to work with a professional who knows what they’re doing within that context.
I’ll use myself in this next example. I might be finally getting approved for Disability Insurance. I want to move to a trans-friendly state like California. How would you advise a person like myself who’s attempting to do this during the Coronavirus?
Timothy LaPean: The more you can do to lower your monthly expenses without making yourself miserable, the more freedom you have. Regular and recurring payments limit our freedom. Those are the things that determine that you have to make at least this much money. With these constraints, your savings won’t go very far. In terms of moving to another state, I think that’s a great strategy. There’s a high social cost of leaving behind social networks. I don’t know about the housing opportunities in California right now. I imagine that moving right after quarantine could work. Some landlords will have vacancies that they’d like to fill.
Sure. And I guess you’d want to keep a running tab of the expenses related to a gender transition in another state?
Timothy LaPean: Look at the availability of care. Prices and procedures vary tremendously. Rent is one thing that tends to move a little bit differently than the overall cost of living. You should also check out groceries and the general costs of getting by in a new place. I’m making broad generalizations here. If you’re coming from a place that’s not very supportive of trans people in a legislative sense, those are often states that aren’t going to take care of health care either. If you move to California, things like car insurance and health insurance might be more expensive. These states typically require insurance companies to provide more generous coverage, which tends to make it more expensive. And you mentioned getting on disability. If people are getting close to retirement age, that’s a good idea. If you’re closer to retirement age, it makes it easier for your claim to get approved. If someone’s close to retirement age and they qualify, I sometimes talk to them about disability because it gives you 30 percent more benefits. And if you don’t get disability the first time, appeal and keep trying.
Hans Heath is a Registered Representative of Cambridge Investment Research, Inc., a Broker/Dealer, and Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. LGBT Financial and Cambridge Investment Research, Inc. are not affiliated.