How Voting Can Affect Your Personal Finances

There’s an old saying in the world of investing and financial advice that “you shouldn’t mix politics with your personal finances.” No matter which party is in charge of the government from one year to the next, most people should just keep working, paying off debt, saving money, and investing for the future. Through good times and bad. 

Whether you’re in financial trouble and need debt relief, or your career is thriving and your bank account is flush with cash, you might feel like politics doesn’t affect your life. But this doesn’t mean that politics doesn’t matter to your pocketbook. Voting can affect your personal finances in powerful ways.

In the 2024 presidential election, only 64% of voting-eligible Americans cast a ballot—a turnout that was 2.5% below 2020. Only 37% of eligible voters cast ballots in all of the past three national elections before 2024.

Voter turnout tends to be even lower for state and local elections. That’s true even though these government offices are closer to home, and could have a big impact on your everyday life, property taxes, small business regulations, local public schools, and public services. 

Here are a few big ways voting could affect your personal finances—and why you might want to try to “vote with your pocketbook.” 

How Your Vote Could Impact Your Wallet

Politicians can’t directly control the economy. No matter how wise or how determined or how powerful America’s political leaders claim to be, the economy is bigger than all of them. Economies grow, struggle, or shrink for complex reasons, based on millions of people and small businesses and large corporations making decisions every day about whether to spend, save, or invest. 

And sometimes, politicians’ choices to try to help the economy don’t work out as well as they hoped. They might try to solve a problem, but cause new problems to arise. Unintended consequences are a big part of making policy. And the effects of politicians’ decisions are not always seen immediately in the economy—they often make policies that bring slower-building results over the long run. 

But politicians’ choices really do make a difference in how the economy works. Where money moves, where jobs get created, when layoffs happen, and how much things cost, as well as how the future might unfold for investors, business leaders, workers, and consumers. That means your choice of who to vote for matters, too. 

Depending on which political party or which politicians are in office—at the federal, state, or local level—voting can affect your finances in several important ways, including the following. 

How much you pay in taxes

One part of the economy that politicians definitely can control is tax rates. Politicians at the federal level are often reluctant to raise income taxes on most Americans, because taxes aren’t popular. But many other taxes get applied at the state and local level, such as property taxes, sales taxes, vehicle registration taxes, and more. As of April 2025, President Trump announced a sweeping new set of tariffs, which are like taxes on imported goods and products—taxes that are paid by American businesses and American consumers. 

The prices of gas and groceries

Politicians don’t control prices, but they can make a difference in overall rates of inflation. This is often seen in everyday life by how much you pay to refuel your car, or in your grocery budget. Some government policies might lead to lower energy costs (like encouraging more oil drilling or renewable fuel production), while other policies might lead to higher food prices (like cutting off immigration for farm workers, or increasing regulations on meat-packing plants). President Trump’s tariffs are widely expected to increase prices, because they could cause companies to raise their prices to cover the cost of paying the tariffs. 

Interest rates and borrowing costs

If politicians in Congress and the White House choose policies that drive higher inflation or cause economic uncertainty, this can make some interest rates go up. For example, higher deficit spending at the federal level (when the government spends more money than it takes in from taxes) could push long-term interest rates higher. That makes it harder for people to get a low-interest mortgage or an affordable auto loan. 

Your wages

Politicians can’t control private-sector wages, but the laws they pass can set standards that affect your paycheck. For example, Congress and the president can set the federal minimum wage. And if politicians in your state or local area pass laws that make your location more attractive to businesses and investors, wages in your area might go up. 

You might want to vote for politicians that you think will pass laws good for your industry or career field. If you’re a teacher, you may want to vote for politicians that promise to boost funding for public schools. If you’re an oil rig worker or auto factory worker, you may want to vote for politicians that promise to boost job growth in oil and gas and auto industries. 

Your insurance costs

Politicians at the state and federal levels have a lot of power over the market for insurance—including health insurance, homeowners insurance, and auto insurance. Many insurance prices go up or down based on overall market conditions, not because of choices by politicians. But political choices can make a difference. 

For example, if politicians in your state require higher minimum coverage amounts for auto insurance, this can make your car insurance premiums go up. Or if politicians in Congress pass a law with more government support to cover health insurance costs, your premiums might go down. 

How easily you can start a business or build a house

Decisions made by politicians can help speed up or slow down building your dream home or pursuing your dreams as an entrepreneur. Some state and local governments make it easier (or harder) to get permits to build new housing. Some states have higher (or lower) fees and regulations for starting a business. 

How your student loans work

Decisions politicians make can affect how your federal student loans are administered, how much your student loans cost, and whether you can get student loan debt relief. 

Your investments and retirement savings

Many Americans own stock, either through workplace retirement accounts or through personal brokerage accounts. The stock market is global, complex, and constantly changing, and it can’t be controlled or dictated by any politician. But decisions by politicians can make the stock market go higher or lower. 

In April 2025, President Trump’s tariffs sent the stock market into a big downturn, with high levels of volatility and uncertainty; investors seemed worried that tariffs would cause corporate profits to drop and economic growth to slow down. If politicians make wise choices for the long run, your retirement savings could get bigger—but if politicians make disastrous mistakes or cause economic crises, your retirement money could disappear.   

In addition, state elections can change things like local education and housing laws, and how your state handles unemployment benefits. 

If decisions from politicians cause your industry to suffer or your job to get eliminated, you could have unfortunate firsthand experience with how voting can affect your personal finances. But even if you never lose your job, even if your income does not decrease, all Americans can see changes in their personal finances because of how people vote.

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Jobs and Wages

Your vote puts officials in charge who could affect the job market by making changes to everything from tariffs to wages. As of April 2025, the Trump administration is charging new tariffs (import taxes) for a wide range of goods and products from other countries. For the past 30 years, American politicians of both parties have generally supported an economic policy of free trade with other countries. America has been importing manufactured products—from shoes and clothes to cars—from countries where labor costs are cheaper. Free trade with countries with cheaper labor has helped Americans get cheaper TVs, phones, appliances, furniture, and other goods. 

A downside related to this system of free trade is that fewer Americans work in the manufacturing industry today compared to 30 years ago. With less stuff getting made in America, there's less demand for American labor, especially for people who don’t have a college degree or technical skills. Many Americans have seen their wages stay the same or even shrink compared to inflation.    

Supporters of Trump’s tariffs believe the tariffs will cause American companies to invest more in America instead of other countries, and bring manufacturing jobs back to America. But tariffs could also cause prices to go up and American jobs to go away. Because tariffs increase costs for American businesses that rely on other countries for their supply chains. 

Tariffs might also drive higher prices at stores, which is likely to cause American consumers to cut back on their spending. Tariffs could cause a recession (frequently defined as six months or more of negative economic growth) in America and damage the entire global economy. This makes the world’s economic “pie” smaller, and makes everyone a bit poorer. 

The 2024 election has already turned out to be very important economically. Who you vote for at the ballot box matters in the real world. 

Another example of how voting affects your personal finances is in the federal minimum wage, currently $7.25 per hour. No matter what your income is, changing the minimum wage can cause a ripple in the economy. Some argue that a higher federal minimum wage allows a larger group of people to earn a living. A higher minimum wage could reduce debt, helping more people put money aside to pay off credit card debt and save for retirement.

On the other hand, some argue a higher minimum wage could make it more expensive for small business owners to keep their employees, thus shuttering businesses and increasing layoffs. That would cause a negative impact on the economy as a whole. Either way, there can be an economic impact on a personal level.

Taxes

Just as your income can change based on politicians’ decisions, so can the amount of tax you pay. Most people are familiar with federal income tax, and pay close attention to whether they’ll get a tax refund at tax time each year. But state and local taxes can make a quieter impact on your budget. 

For example, take a look at your last receipt from the grocery store. How much sales tax did you pay, and on what? Depending on your state, some grocery items are taxed, and some aren't. Add in the tax you pay every time you fill up on gas or grab a bite to eat, and you start to see the bigger picture of state and local taxes and how they affect your pocketbook.

Since elected officials are responsible for deciding how to use tax dollars to operate your city or state, if you choose not to vote, you leave it up to your fellow citizens to decide for you.

How are your local and state tax dollars spent? The answer often ties back to who you voted for in the election. Do you agree with how your state and local government is spending on schools, streets, or police? 

While federal taxes are definitely important to your financial health, you should also keep an eye on state and local taxes—and the quality of public services these taxes fund.

Local Laws and Regulations

In addition to tax rates, voting affects your personal finances through local laws and regulations.

Do you live in a city or state that has a shortage of affordable housing? Some states and cities have regulations to make it easier and cheaper (or harder and more expensive) to build new housing. Other states and cities have rent control—so some people live in homes where raising the rent is forbidden. 

It’s understandable that people might be reluctant to allow building new housing complexes next to their neighborhoods (this attitude is called “Not In My Backyard,” or “NIMBY”). And many people sympathize with tenants who want rent control, because we all need an affordable place to live. But unfortunately, NIMBY policies and well-intentioned laws like rent control can lead to less affordable housing for everyone else. Some economists argue that rent control can cause housing shortages by taking away the incentive for developers to build new housing. Local and state elections are where these housing policies get decided—where politics literally “hits close to home.” 

So Why Should You Vote?

No matter which party (if any) you support, it’s important to understand the big picture of which policies you’re supporting. Voting can affect your personal finances in many ways, from the price of gas and groceries and the size of your paycheck to what happens with your loan interest rates and retirement savings. Voting and being involved in democracy—including at the state and local levels—is one more good way to build a stronger financial future for yourself and your loved ones.