Barack Hussein Obama served as the 44th president of the United States from 2009 to 2017. During his time as President, Obama was an inspiration to many with his people-friendly policies and generally friendly demeanor. He taught America many lessons; some of the most important ones were his finance lessons.
Here is a list of twelve financial lessons Obama taught America.
Emphasizing Financial Literacy
During his time in office, Obama strongly emphasized promoting financial literacy. Financial literacy gives people the knowledge and skills necessary to thrive financially. Obama’s measures, like declaring April as “National Financial Capability Month,” encouraged Americans to gain financial knowledge and achieve economic freedom. He is also a firm believer in teaching kids about finance; he encouraged parents and schools to promote financial literacy in children.
Prioritize College Savings
Through his actions, Obama taught us that prioritizing college savings for children is very important. He knew how volatile the loan industry was and that anything like interest rate hikes could happen. This is why he invested in college savings plans for his daughters and pushed the expansion of 529 college savings plans, which allow families to save tax-free for their children’s education expenses. These plans help alleviate the financial burden of college tuition.
Clear Planning
Having a clear financial plan is essential, and Barack Obama emphasized its importance and advocated for creating clear financial plans that included everything from budgeting to investing. Obama often highlighted the need for individuals to take proactive steps to manage their finances, such as creating budgets and understanding their spending habits, to avoid debt and financial instability. He showed this by following a clear plan, where he cleared his college debt, repaid his mortgage, and saved for his daughters’ education.
Avoid Debt
Avoiding debt is a lesson that Obama taught America through his personal life. He shared his journey of paying off his law school debt only eight years prior to becoming President and talked about the financial challenges he and his wife, Michelle Obama, faced. Obama encouraged Americans to prioritize debt repayment and focus on aggressively paying off debt as fast as possible.
Live Within Your Means
Obama taught that prioritizing expenses from most to least important is essential. He also taught people that mindful spending is essential for a stable financial future. Obama emphasized saving and living within one’s means rather than living an inflated lifestyle that could incur debt.
Invest in Health
Investing in health is an important financial lesson that Barack Obama taught America. He saw that unplanned and uninsured healthcare costs could push Americans into debt traps and advocated for the Affordable Care Act, which reduced the financial burden of medical expenses. Obama taught Americans to invest in quality health insurance that will come in handy when needed. He did not see health insurance as an expense; instead, he saw it as an investment.
Take Responsibility
Taking responsibility for one’s finances is an important lesson Obama taught America. He is a staunch advocate for personal accountability and has proved that through his actions inside and outside the White House. He encouraged Americans to take responsibility for their financial situations and actions and to recognize that financial stability begins with individual actions and decisions. Leading by example, Obama called for a Financial Crisis Responsibility Fee on firms with huge debts to recover the money of American taxpayers.
Save and Invest
Obama is a firm believer in the power of compounding, which starts with saving. He taught us that saving whatever we can and then investing it applies the magic of compound interest that could lead to significant gains in the long term. Saving and investing are equally important for financial freedom; in fact, one cannot exist without the other. Hence, strong saving goals are essential, and Obama taught Americans to set specific savings goals and adhere to them, even when faced with temptations to overspend. He also encouraged informed investing, urging individuals to educate themselves about different investment options and everything about the markets.
Long-term Goals
Obama taught America the importance of setting long-term financial goals and how they are vital for financial stability. He urged people to focus on their long-term goals of financial freedom instead of fulfilling their present needs, which would give them nothing but instant gratification. During his presidency, Obama constantly focused on long-term goals that could help America in the future, even after his term, and he followed this example in his personal life as well by saving from the beginning.
Transparency in Financial Matters
Obama always emphasized transparency, as he observed that the lack of transparency led to the financial crisis. He took severe measures to enhance transparency, and his commitment to transparency could be seen both within and outside the White House. One example is the signing of the FOIA Improvement Act 2016, a sign of Obama and his administration taking steps toward transparency in official matters.
Embrace Change and Adaptability
When Obama became President, America and the world were experiencing one of the worst financial crises ever. Despite all the difficulties, he took everything in stride and adapted by implementing the American Recovery and Reinvestment Act (ARRA).
This can also be applied to personal finances, as financial stability isn’t easy and is filled with unexpected changes. Obama taught America to be proactive, embrace change no matter how tough or uncomfortable it is, and adapt.
Be Ruthless in Budgeting
Being ruthless in budgeting is the first step toward financial stability; the second is sticking to the budget. Obama taught America that discipline when it comes to spending is very important. He taught this by adhering to saving for his daughters’ college and paying off his college debt. Obama followed the same principle as the President when he took office after the 2008 financial crisis. He ruthlessly called for economic reforms and budgets. He ensured everyone followed them by implementing accountability measures, like establishing the interagency Financial Fraud Enforcement Task Force.