How Voting Can Affect Your Personal Finances
- Who you vote for can affect your finances.
- Your vote can determine taxes, jobs, wages and healthcare.
- Research the issues and vote accordingly.
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Politics and personal finance – do they clash or click? It may not seem like it, but politics and your finances cross paths no matter which side of the aisle you vote with. Voting can affect programs and priorities like taxes, jobs, and healthcare, yet only 56% of the U.S. voting-age population voted in the 2016 presidential election.
It’s important to be an informed voter at the federal level, but local and state elections could pack an even bigger financial punch. If you want to add on to your house or open a business, the laws made by your local representatives govern how, when, and where you do those things — and so much more.
Early voting has started across much of the nation, but are you still debating whether to participate? If you’re looking for good reason to make your voice heard in this election, we have several:
How your can vote impact your wallet
It’s well known that the economy moves in cycles, with dips that cause financial strain for many Americans. But intentional economic policies by lawmakers, like expanding or limiting access to affordable healthcare, can affect your personal budget as well. Being an active participant in the voting process can affect your household budget due to changes in:
The level of the federal minimum wage
Your healthcare costs
How much you pay in taxes
How your federal student loans are administered, and whether they could be forgiven
In addition, state election outcomes can change things like local education and housing laws, and how your state handles unemployment benefits. If you were one of the millions left jobless because of the pandemic, you know firsthand how unemployment benefits affect your personal finances. But even employed Americans can experience changes in jobs and wages as a result of their vote.
Jobs and wages
Your vote puts officials in charge who can affect the job market by making changes to everything from tariffs to wages.
For example, let’s take the federal minimum wage, which is 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 to participate in the economy. And a larger wage could help control problems like the consumer debt crisis, helping more people put money aside to pay down 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 lay-offs, causing a negative impact on the economy as a whole. Either way, there can be an economic impact affecting families on a personal level.
Just as your income can fluctuate, so can the amount of tax you pay. For instance, 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 are not. Add in the tax you pay every time you fill up on gas or grab a bite to eat, and you may have a state and local tax impact on your budget that you will notice every month.
And how are those tax dollars spent? Do you agree with spending on schools, streets, or police? The answer often lies in who you voted for in the election. Since elected officials are responsible for implementing decisions on how best 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. While federal tax affects your financial health (remember the recent discussions about a payroll tax deferral), it’s equally important to pay attention to state and local taxes.
We do not have government by the majority. We have government by the majority who participate. – Thomas Jefferson
Local laws and regulations
In addition to tax rates, voting participation affects other local laws and regulations that could also impact your personal finances.
Think about rent control laws. Do you have city-wide or state-wide rent control? Do you think rent control effects not just renters and landlords, but the economy in your area? Local and state elections are where the people who make this policy are elected.
Here is one more example. In California, voters elected in 2016 to ban lightweight plastic bags to reduce the amount of plastic waste in the state. The benefits from this law included the preservation of wildlife and a reduction in litter and pollution. But those who opposed the law claimed that the change put an extra economic burden on consumers. If a consumer forgets their reusable bag, they are charged $.10 for an alternative bag at checkout. At this time, eight states have banned single-use plastic bags.
A good way to learn about what is at stake this year in your local and state elections is to look up who’s running for office and the current year’s ballot measures. Here is how to find your local election website for more information on voting local.
So why should you vote?
No matter which party (if any) you support, make sure you get out and vote! Voting is one more responsible way to build a financial future for yourself and your family. If you want other tools to build strong financial habits then be sure to check out all of our free resources on the Freedom Debt Relief Blog. You can read the latest from our blog now.
7 Smart Ways to Use Your Credit Cards in a Recession (Freedom Debt Relief)
Best and Worst States for Coronavirus Unemployment Benefits (Freedom Debt Relief)
Why Voting is Important (National Geographic)