This week has been pretty intense, both for me personally and for the entire US. The loss of Just Ruth Bader Ginsburg has struck many to the core. With this in mind, I will not be reviewing an article per our normal Money in the media Monday. This week for Money in the Media #33 we will be discussing a simple tweet from Dave Ramsey.
Now, I understand that Dave Ramsey has done a lot of good for so many people and helped them get out of debt and build/rebuild their financial lives and I am all for that. HOWEVER, I take some serious issue with this statement. First though, let me go into the concept I agree with (for the most part).
How I Agree
What he is really trying to bring to light is that you have more control over your day to day finances than what happens in the White House. Meaning the major day to day decisions you make that can make or break your savings and/or debt payoff are within your locus of control. This is completely true. Your individual spending habits will more greatly affect your household finances than anything else. In fact, much of personal finance and what I work with my own clients on is related to your own personal decisions about how you want your life to take shape and saving/spending in order to reflect that.
The problem is when what happens in the White House forces changes to your household finances. Often those changes are in the negative direction with long lasting effects.
How I Disagree
The negation of the direct effects from actions taken in and/or by the White house that can directly effect your household is how I disagree with Dave Ramsey. For example, the ruling that same sex couples could be denied based on their sexual orientation for adoption and foster care. This has the potential to directly affect my family, seeing as I am married to a woman. We have discussed foster care and adoption as we are very interested in having a family. If it is legal for us to be denied based on being LGBT, then there would be much higher costs associated with growing our family. This would be the direct result of actions in the White House.
Additionally, it is not required for our insurance to cover the infertility costs associated with this until after 1 year of attempts, which could be a six-figure bill by then. As you can imagine this would drastically affect our ability to save or spend in other ways. This would change not only our monthly budget but, future projections for retirement as well. This is similar to ripples in the water, the effects can be felt far from the point of impact.
Of course, there are many other ways in which a household budget can be affected by the decisions made on a federal level. This example is just an easy pull from my personal life. The point remains that from tax rates to healthcare plans, there are some very large influences that the White House has on a household budget. To make such a statement without taking into account the ways in which the White House can affect the individual households in the US is to look at a budget in a vacuum.
Vacuums: Good For Cleaning, Bad for Budgets
When I meet with my clients, we will go through their budget and look at it as a whole. Then we will break down every category only to build the budget back up, taking into account personal goals and larger outside influences. Looking at a household budget without taking into account outside influences and backgrounds can doom it to failure before you even get started.
Context is everything and what happens in the White House does influence your household budget. One thing that is within your control about this though is VOTE.