The Link Between Elections and Your Financial Outlook

Every 4 years, there is a presidential election that gets a lot of attention. In between those, are mid-term elections, like we have in 2026, that sometimes are high-profile but other times are less so. This is one of those years in which there is, in fact, plenty of attention being paid to the election. But there are other elections, often more focused on local candidates and issues, that people often are not as tuned into but can still have an important impact on your personal situation and also your financial situation. People don’t always see the tie-in between their vote and their pocketbook, but the policies that are implemented by elected officials have real-world impact on many of the things you have to deal with in your financial life. Therefore, it is important not only to be informed about what is on the ballot in elections you are eligible to vote in, but also that you understand the consequences that could come from who gets elected and what measures get passed. With that in mind and the 2026 Mid-Term elections right around the corner, this issue of the newsletter will provide insights on how your vote can translate into what happens with your finances in both the present and the future.

The Impact of Elections on Your Day-to-Day Finances
Sometimes the issues that candidates for elections focus on don’t immediately capture our attention in terms of how we feel the financial impact in the moment. However, with the state of prices for many things today, such as food and gas, this election in many ways is coming down to how people feel about what they can afford and who can help to address rising costs most effectively. It is not only the level of prices that have a real effect but how those prices are trending that affect people’s outlook on their financial status. Inflation became a major concern post-COVID, trending up in 2021 and peaking in 2022, but was declining in 2023 and 2024 and into 2025. However, the combination of tariff policy and the Iraq war, which has caused an increase in fuel prices, has caused inflation to start trending back up, to the point that the Federal Reserve was led to increase their target for interest rates in September in an effort to curb inflation. As a result of that interest rate increase, we can expect borrowing costs in general to go up as interest rates for things like mortgages and car loans follow the trend. Although it may not be as easy to link elections to your income, the decisions made by elected officials can impact the income you are able to generate. This can be seen by their stance on minimum wages as well as in the kind of business climate they help cultivate that can affect businesses wanting to locate in your area and how profitable it is for those businesses to operate there, such that they can afford to pay their workers more money. Some of the incentives elected officials offer to businesses come in the form of tax breaks, and we will discuss more related to taxes in the next section, but the approach of elected officials to taxes in general also impacts your personal day-to-day finances by impacting how much of your income you actually can bring home. For this reason and others, it is worth your while to pay attention to what candidates are planning to do relative to taxes.

Policy Decisions and Long-Term Consequences
As just noted, an issue that is often debated between candidates is tax policy, and while opinions differ on how to enact such policy, nobody wants to pay any more taxes than are necessary because every dollar that is paid in taxes is one less dollar available for what you want to use your money for. While there have been changes to tax policy in recent years, due to legislative limitations and political priorities, some of the changes have been subject to a limited lifespan, which can make it confusing to plan around. The most recent major change in the tax code occurred in 2017, at which time significant changes were made in terms of available deductions and the elimination of exemptions on the federal level. Depending on your family circumstances, those changes may have been more favorable or less favorable, and the outcome could differ in the short vs. the long-term. Those tax questions are largely national in nature, but tax policy closer to home can be felt as well. For example, cities and states may have measures up for vote regarding sales and property tax rates, which could result in a change to how much you pay for a variety of things both now and in the future. Another important issue that may not come up directly for vote but can be seen in candidates’ policy positions is their approach to regulations.  Regulations, when applied overly broadly, can increase businesses costs, which ultimately get passed along to the general public, but a lack of regulations can result in costs that may appear less obvious on the surface but could be extremely costly later, whether that is in environmental issues, health concerns, or other things. More tangibly, things like regulations or the lack of them in the borrowing space can result in changes to the cost of debt, the ability for borrowers rights to be protected, or in the case of student loans, for example, the ability to pay back or be forgiven for loans taken out. Policies around so-called social programs and benefits are also important to understand because if you or someone you care about has circumstances that result in them needing to access those benefits, the funding of those programs becomes critical. Access to affordable healthcare has been a hot button topic for a long time, and elected officials have a strong hand in determining how healthcare is administered nationally and state-by-state and the ability of individuals and families to cover those costs. These are just some of the policy issues that are important to think about from a longer-term perspective when voting in elections.

Elections and Impact on the Stock Market
In these times when surviving day-to-day can feel more challenging than it has in some time, not everyone is as concerned about the movement of the stock market and its impact on their long-term wealth building potential, but historically we have seen trends during election cycles that are worth considering. It must be said that any market trends that have occurred cannot necessarily be attributed directly to the election cycle, and of course, past market performance may not indicate what will happen in the future, but those trends are worth pointing out. Historically speaking, the stock market has performed very well in the year following mid-term elections. In fact, since 1946, the year following every mid-term election, has produced positive returns, with an average return of over 14%. It is worth stating that despite the economic uncertainty the general public has expressed over the last year or more, the stock market has continued to climb, with the S&P 500 up almost 30% through the year ending September 2026. Of course, it is possible that some of the growth that has occurred in the market is in anticipation of what will happen post-election, but that remains to be seen. Regardless of what historical trends have shown, the markets are primarily driven by business results over the long-term, so it would be unwise to make any assumptions about what may happen in the coming year based on past election history and make your investment decisions on that.  Investment decisions are best made with a long-term view in mind and should take into account the electoral environment but not allow that to drive decision making.



This general election season promises to be one that will shape our lives in a number of ways, including financially. If you want that future to be more favorable for you financially, it is your civic responsibility to be informed about the items up for vote and to let your voice be heard.