Here's What Your Vote Says About Your Money Style

By Tim Lemke on 9 September 2016 0 comments

Does your philosophy toward money influence your politics? Do you support or oppose certain candidates based on your own spending or investing style?

There are plenty of stereotypes out there, but also a good amount of evidence suggesting that the way we vote is a reflection of our approach to money. The studies sampled below vary in size and quality, so take them with a grain of salt, to be sure — but here's what they tell us about your vote and your money.

1. Conservatives Save, Liberals Spend

This is a generalization, but it does appear to be backed up by some data. A 2014 Gallup poll revealed that 64% of self-identified conservatives prefer saving money over spending it, compared to 54% for self-identified liberals. And this difference in attitude appears to exist even among young people, though there is growing evidence that Millennials learned to become more frugal after the Great Recession.

2. Democrats Have More Credit Cards, But Use Them More Wisely

A survey from Credit Sesame last year revealed that people in Democratic (or "Blue") states have more credit cards and higher credit limits than those in Republican-leaning states. Republican states, on the other hand, use fewer cards and have less debt overall, but had 34% more people who have gone over their credit limit.

3. Beliefs Guide Investing

If you have strong feelings on certain social or political issues, it may impact how you shop and how you invest. A conservative voter might not want to invest in movie studios that make violent films, or have sexual content. An anti-gun voter would avoid a mutual fund that invests in Smith and Wesson. Environmentally conscious investors will research a company's record on sustainability or pollution before becoming shareholders.

These days, there are hundreds of socially conscious mutual funds that exclude companies for a reasons ranging from their sale of tobacco or alcohol, their use or production of nuclear power, their role in the defense industry, or their labor practices.

4. If Your Candidate's Winning, You're More Optimistic

If the candidate you support is in the lead, then you feel good about the future. And an optimistic person is more likely to invest their money, under the assumption that the economy and stock market will do well. Research shows this is true whether you're a Democrat or a Republican. A study titled, Political Climate, Optimism, and Investment Decisions showed that Democrats were more optimistic about the economy after 1992 and 1996, but that trend reversed in 2000, when a Republican took office.

5. You Should Vote the Way You Should Invest — With Your Eyes on the Horizon

Accumulating wealth requires patience and time and a willingness to look at the big picture. The best investors take a long view with their money, rather than buy and sell on a whim. And it's possible to vote with a similar mindset. When voting, do you wonder which candidate is best equipped to plan for the nation's long-term health? Voters taking the long view might be attracted to candidates who talk about things like infrastructure investment, the cost of entitlements, or future changes in technology or demographics.

Do any of these money and politics links ring true for you?

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