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Why you should stop complaining about Obama and the budget — and fix yourself first

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I wrote this a few months ago, when the entire country was freaking out about Obama’s budget and the bailout, but never got around to posting it. Even though it’s a few months old, I cover why people love to complain about taxes, macro-policy questions, and Obama, but fail to spend even 1 hour managing their own money.

* * *

Turn on the TV or read any comments section of an online newspaper — even the New York Times — and you will quickly feel the need to take a shower and to physically distance yourself from common citizens of dubious intellect.

Dumb people

You’ll notice people complaining about their taxes, while never cutting their own spending, earning more, or optimize their spending (like the CEO Model I describe in the Save $1,000 in 30 Days Challenge).

The problem is multi-faceted:

First, once something incurs spending, it’s incredibly difficult to stop spending on it. Why? On a national level, because there’s momentum, jobs, and opposition to change. On an individual level, we’re more motivated by loss than by gain, so it’s easier to do nothing than to take away something we’ve grown accustomed to.

Second, people get emotional. You see this with jobs and taxes (and rightfully so), but also with areas as prosaic as design changes on Facebook. In many/most circumstances, we don’t like change, and we over-emphasize our own interests (“I CAN’T UNDERSTAND WHY THEY DON’T MAKE A MAC PRODUCT!!! GRRR!!), while never seeing the big picture (Macs have a ridiculously small market share).

Third, the natural progression is to do more: more staff, more funding, more spending. Without a conscious spending plan, you’ll find that executing a Think, Want, Do analysis will reveal some huge disparities in where you think your money is going vs. where it’s actually going.

Let’s take a look at some numbers.


Federal spending almost always increases


Federal spending goes up a lot
Those numbers are in billions. From Heritage.org
.


When people argue about a local issue, where does that fit into the bigger picture?


wallstatsdatlarge


Stunning visualization of Obama’s announced $100m budget cut


Now, you can take a couple routes after seeing these:

1. Complain about Obama, Democrats, Republicans, the war in Iraq, etc. The funny thing is, people love to debate minutiae but fail to realize that energy is a valuable resource — and it’d be much more productive to focus on things we can control (like our asset allocation, automation, negotiation, etc). If you do this, you are just like everybody else who loves to complain but does nothing to improve their own finances.

2. Realize that the real message of this post is to focus on the BIG WINS — the things that let us save significant amounts of money. While it might be fun and emotionally liberating to debate over some local issue, the way to move the federal budget forward is to fix the 800-lb gorilla: healthcare costs. The same is true of your spending: The very first tip in my Scrooge Strategy is called the Two-Headed Savings Approach, where I show you how to focus on dramatically cutting the costs on your two biggest discretionary expenses, rather than trying to save 5% on 50 things (as most people do), and ending up feeling guilty and achieving no behavioral change.

Stop complaining about things you can’t control. Realize that the correlation between macro-economic and political decisions has very little to do with our money on a day-to-day basis. Most importantly, we’re cognitive misers, and only have a limited amount of attention. Focus on your own finances first, and let the fools (or politicians) debate the macro-level.

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55 Comments on "Why you should stop complaining about Obama and the budget — and fix yourself first"

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Stephanie PTY
6 years 11 months ago

Well said, Ramit. Although it’s important to have debate and informed voters, it seems that when people “debate,” they mostly just spread misinformation and rumors. People need to take the airline safety mentality here: “secure your own mask before trying to fix the government!”

MoneyEnergy
6 years 11 months ago

Amen! There will always be government and whatever yours views on it, it is smart to focus your energies on what you actually have control over. Strictly speaking, if government decisions bother you that much – emigrate! Otherwise it’s most productive to do the basics – increase your income, your savings, and invest it wisely. I’m not saying keep your head in the sand, though – we need to stay aware of what’s going on. Just don’t get caught up in the latest bandwagon of complaints and excuses.

Arvin Motion Graphics
6 years 11 months ago

Pretty sure there’s a 5,000 pound gorilla next to the 800 pound one, and it’s defense costs. Unless you consider that one of the things we just can’t change.

Manisha Thakor
6 years 11 months ago

Realize that the correlation between macro-economic and political decisions has very little to do with our money on a day-to-day basis.

Bravo, Ramit! If each one of us committed to spending 4 hours a month improving our knowledge of personal finance, the forward economic momentum in this country would be astounding…

Jordan_M
Jordan_M
6 years 11 months ago
I think I’ll hold people even more responsible than Ramit – they need to take a look at their own finances AND be a participant in how the government manages theirs, not just complaining about it. Part of your money will be going to the government regardless and therefore it’s up to us (especially politically apathetic young people) to hold the powers that be accountable. Another point: Ramit’s arguments are contradictory to what the economic goal of the government is: to get us to spend more. I think it will be an uphill battle towards fiscal responsibility for everyone if… Read more »
Jon
6 years 11 months ago
Ramit…It is so dissapointing to see such a thoughtless article from a normally thoughtful person. I have been reading your blog for a long time, and you have so many great pieces of advice for people. This is not one of them. Please please please understand the situation when you write an article like this. You say, “the way to move the federal budget forward is to fix the 800-lb gorilla: healthcare costs.” Do you understand that every bill that is being proposed will INCREASE healthcare costs? That’s one reason why people are upset about it. And in America, our… Read more »
Jon
6 years 11 months ago
Ramit – I am not confusing the two. How are you foolish to not realize that taxes are a humongous percentage of virtually everyone’s spending plan? Taxes are not a ‘tiny area’. If legislation in Washington is going to impact taxes in a huge way, as the healthcare bill certainly will, then how is focusing on it focusing on a tiny area that accomplishes little? If the federal government spends money unnecessarily then a huge chunk of money will be missing from my pocket. I think this is an instance where you are breaking your own advice, and choosing to… Read more »
Jeremy Freelove
Jeremy Freelove
6 years 11 months ago
Ditto, Jordan_M. What about option 3, Ramit? Manage your personal finances AND perform your civic duty of being involved in government affairs. Maybe worrying about taxes and other macroeconomic policies wont affect our day to day finances, but it certainly has a large impact in the long run. When it comes to decisions like this, I prefer to use the utilitarian question, “What if everyone behaved like me?” If we all were to ignore government spending, it would doubtlessly continue rising as your graph shows. Instead, if all of us took five minutes to write a letter or email to… Read more »
DL
DL
6 years 11 months ago
I think that you have a great point. However, inasmuch as we need to take individual responsibility for our own spending we need to be vigilant in keeping our government accountable for its/our spending as well. Just because government spending has historically always gone up doesn’t mean that it should continue to do so. If my individual spending continued to go up every year and yet there were years that my income did not go up at the same rate then I’d start running a deficit. I can do that for a year or two but not much more, and… Read more »
Jon
6 years 11 months ago
Ramit: Do you have any sort of expertise or knowledge regarding the healthcare industry? If so, I would be very interested in what that is which allows you too make the statement that ‘maybe it will increase costs, or maybe not.’ Because, every version of the healthcare bill that has been floating around WILL increase costs, according to the CBO or other industry professional. Additionally, you make the error of thinking that it is not possible to lower healthcare costs and eliminate pork-barrel spending simultaneously. While your impression may be that pork-barrel spending is a relatively small percentage of the… Read more »
JimE
JimE
6 years 11 months ago

I’m disappointed in this one, not because it has a political bent but because you posted a similar article a ways back in regards to the economy and personal finance. The story is the same and by and large I agree with both, however I think you’ll find internet political debaters are 10000000000000000000 times more ridiculous about getting the point than the $3/day Latte pontificators.

Chad
Chad
6 years 11 months ago

@Jon,

Quite being a hater. You are completely missing the point of Ramit’s Post.

Scott
Scott
6 years 11 months ago
@Jon… so what do you plan to do about it? Are you going to write your Congress-person? Are you going to head to the nearest town hall meeting and raise a ruckus? Are you going to get in with a crowd of protesters and hold a sign? Debate on an internet forum? When it comes time, those voters in Congress are going to vote right down the party line (or with the lobbyists) when it comes time and the bill will pass, and all that effort will be wasted. I can see a person trying to be involved in politics… Read more »
Alison
Alison
6 years 11 months ago

I think people who don’t spend time to understand their own finances have no real background to judge how the Federal Government is handling it’s finances which are very complex. What one man considers a pork barrel project could be the livelihood of another man. It’s easy to yell about the “bums” in Washington DC but it’s much harder to make a positive impact. I think Ramit is suggesting that we get our own house in order first.

Track Our Spending
6 years 11 months ago
While I agree with this post and that people should focus on their own personal finances before debating on national issues, sometimes those of us who often do think about our own personal finances and how to better our own situations need to vent about the little things that we actually don’t have control over. Although I know I can’t change it, it does frustrate me that part of my paycheck is taken for taxes I don’t agree with. Personally, I don’t think someone who is healthy, doesn’t smoke, doesn’t drink, etc., should have to pay taxes for a national… Read more »
Alison
Alison
6 years 11 months ago

@Track Our Spending

You are assuming that everyone who gets health care has bad habits. Anyone can get sick or have an accident. You are already paying for people with bad habits through higher insurance rates and longer wait times in emergency rooms. Sometimes your tax dollars will go to something you don’t agree with. I bet somebody somewhere didn’t want to pay for the interstate highway system. People w/out kids may not want to pay for public schools. But these these things are for the greater good of our society.

Chad
Chad
6 years 11 months ago
Again those of you discussing the Federal Goverment, Taxes and all the other BIGGER issues are completely missing Ramit’s point. Put it this way. If you had invested the last 10 to 15 minutes reading and ACTing on any of the 30 Tips that Ramit has listed here, rather than composing a long rambling response on the Govt, Budget, Taxes and Mr Jon here, the point of this article would’ve been made and you might actually have started your progress toward securing and growing your personal wealth / Finances. And no, I don’t work for Ramit and haven’t even met… Read more »
Chad
Chad
6 years 11 months ago
Mike
Mike
6 years 11 months ago

My biggest expense, by far, is taxes. If you don’t think there are dead serious financial implications facing me with the projected 70% debt / gdp ratio within 10 years, you are crazy. It’s not sustainable for your readers to live far beyond their means, but you wouldn’t worry about our representatives doing the same thing with our hard earned dollars?

Mike

Jon
6 years 11 months ago
@Chad – You have proven yourself to be a presumptious and foolish poster. You said, “Quite being a hater. You are completely missing the point of Ramit’s Post.” First off, I am not a hater evidence by the many compliments that I issued to Ramit on the majority of his content. Secondly, I did not miss the point of Ramit’s post. I just disagree with it. While I think most of content is excellent, I think this article was not well thought out. Therefore, it is you who is the “hater.” You falsely assume that those of commenting here have… Read more »
Alison
Alison
6 years 11 months ago

I think Ramit’s point is (and Ramit can correct me if I’m wrong) don’t take action on a political level if you haven’t taken care of your personal finances. I don’t think he has any problem with a person doing both at the same time.

Mike
Mike
6 years 11 months ago

My top 8 expenses as a percentage of my spending (not including income taxes). Over the last year August through August, according to mint.

47% on house including mortgage, property tax, hoa, mait., improvements and a refinance
14% on grocery and restaurants
7% on travel
6% on bills / utilities
6% misc shopping
5% entertainment
4% auto
3% health and fitness

Just federal and state income w/h ytd would dwarf my ytd spending by 34%. That doesn’t even include sales tax, property tax, car tax / registrations, alcohol and other sin taxes, etc.

Not sure where you’re going with this but there you are.

Mike

Alex Andreev
6 years 11 months ago
Ramit, I’ve disagreed with you before in another post, so here we go again. First, let me say that I DO understand the point of your post and this is an important message that most people need to hear: control what you can control and optimize the sh*t out of it. But let’s also participate in the democracy we all live in. I agree there’s a lot of uninformed people out there messing it up for the rest of us, but I assure you an individual CAN and DOES affect change on the macro-level. It may not do much good… Read more »
Matt
Matt
6 years 11 months ago

Faaaaantastic post, Ramit. If I may offer one tip for you:

Don’t respond to crazy people who miss the point of the post.

Also, if Mike ever emails you his spending pie chart (and it is legit), I’d love to see a post about it.

Mike
Mike
6 years 11 months ago

I sent an email with the pie chart. Please don’t use my full name or email on the blog. Thanks.

Mike

Jon
6 years 11 months ago
@Scott – I have written my congress person and other lawmakers, and spoken with them. I have attended town hall meetings, but I didn’t cause a “ruckus”. I didn’t hold a sign in a crowd of protestors. I have had discussions on various internet forums. I’ve researched the various aspects of the issues and spoken with knowledgable and well-known industry professionals. While you are correct that often, Congress does vote along party lines, you have to realize that in relation to healthcare, not even one party can agree on what should be done at this point. All we need is… Read more »
K
K
6 years 11 months ago

Y’know, I think I’d vote for you. 🙂 You certainly have enough experience balancing fiscal responsibility vs quality of life.

Mike P
Mike P
6 years 11 months ago
I for one agree with the article as written. I find that most of the people I encounter in my day that complain and moan about things in general have not taken steps to address their concerns. This guarantees that tomorrow will be filled with the same complaining and moaning. I don’t think there was any indication that Ramit desires a lack of involvement in politics, but that we need to look inward at our own situations and make sure we are taking care of the homefront before we spend time and effort trying to steer the course of the… Read more »
Jon
6 years 11 months ago

I don’t think anyone would disagree that personal finance is important. The problem is Ramit is dismissive of the thought that individuals can take an active role in national politics to influence their personal financial picture.

I can’t fault anyone for “taking care of the homefront”, but we need to realize that it is possible to do that while simultaneously participating in shaping our nation. America is a great nation, despite President Obama’s best efforts, and the reason it is a great country is because many people have been willing to put the country ahead of self.

Mike P
Mike P
6 years 11 months ago
@Jon, I agree, we can take care of ourselves and participate in civics. However, I do not think the article was dismissive towards that. My reading of it points more towards the people that blame their problems on larger external forces rather than trying to do what is within their control to better their situation. Let me give you an example of where I am coming from: I work with a guy who had a great reputation of talking about how screwed he was, how much smarter he was than other people in our group. He was quite generally a… Read more »
James
James
6 years 11 months ago
Ramit, you’re always preaching that people should take control of their finances, that you can achieve your goals through automation, spending plans, and strategic investment. What I don’t understand is your lack of faith that people can also take control of their government’s spending and put their government on the right path. Everything that you preach on a micro-level you abandon when it comes to macro issues. I’m not sure if you’re working from the ground up, a viable strategy, and will expand your thinking to a broader level as you move forward. But how can you so strongly recommend… Read more »
Kyle Hansen
6 years 11 months ago

I think the book “7 Habits of Highly Effective People” said focus on your circle of influence not your circle of concern. If you do this, you circle of influence inside the circle of concern will become larger.

JT
JT
6 years 11 months ago
I read some of the comments before reading the actual post, ha. After actually reading it I think the point was to just focus on things you can control (your spending, saving, and investing) vs. things you can’t (at least directly) control, and to not use congress or obama as a “scapegoat” for why your finances are a mess (too many taxes, etc). I don’t think he was saying don’t get involved with your government, or voice your political opinions, just that those decisions aren’t things you can directly control – so make sure the things you can control are… Read more »
A-ron
6 years 11 months ago
I was just writing about this the other day as it pertains to jobs. You’re dead on when you say people are more motivated by loss than gain. Most people are living in this scarcity mindset, which externalizes everything, which leads to complaining when things don’t go their way. They want someone else to fix their problems. But this is how we are raised in the US, dependent on the system to provide us with what we need. We’re taught to be servants, not freely thinking individuals. Kind of off topic, but this is really the big picture.
RB
RB
6 years 11 months ago
I will say this….. How LONG would it take you to see financial results due to your immediate actions at home (saving more, spending less, earning more) vs. your actions at the NATIONAL level (going to meetings, writing THOUSANDS of letters to congress, etc, etc)?? EXACTLY, You will be waiting for a LONG TIME to see ANY immediate (realistic) change in your finances. Meanwhile those who were smart to work on the things they DO have control over, got wealthier!! Am not against people being involved with the government, but really?….. crying, cussing, complaining, etc about it in blogs, and… Read more »
Jon
6 years 11 months ago

@RB – It is well known that the IRS does not audit millionaires at with the same frequency as lower income groups because audits of those in the 150-200 and upwards yields greater income for the IRS. This is largely due to the tax avoidance means available to the extremely wealthy.

However, I share your belief that upper income filers should be more concerned about taxes than lower income, because an additional 10-20% of a millionaires income is A LOT of money to be giving a government that does not spend efficiently.

Kevin@OutOfYourRut
6 years 11 months ago
Ramit–I’m a good deal older than you, and I’m fully prepared to admit that you are 100% right in what you are saying. The country has been controlled by Democrats, by Republicans, and it’s been split, and the direction and end result are always the same. Every election we get the call to “vote for change”, and within 12 months of the election we realize once again it ain’t happening. Probably the people who get in office realize once they get there that there isn’t much THEY can do either! There are too many entrenched interests that must be served,… Read more »
John
John
6 years 11 months ago
As pointed out by others, many of you are missing the point of the post (especially you Jon), which I believe to be: (1) A parallel is drawn between personal finances and the budget cuts of the Obama administration: instead of focusing on the big wins (i.e. the healthcare budget), the Obama administration is debating minutiae (i.e. 100 million dollars out of trillions). It is conceptually at odds with Ramit’s philosophy towards personal finances. (2) Many people like to spend hours complaining about external factors when they could easily deal with internal factors which would in all likelihood outweigh the… Read more »
liv
liv
6 years 11 months ago

yes, i wish people would stop hating on obama too. also, it’s only been like 8 months since he’s been in office. we’re not going to fix this economy tomorrow…it’s still taking time. why are people assuming that since it’s not fixed now, he is not doing a good job?

fix your household economy and pay attention to the current US one. you can still do what you can to vote and change the world, but take care of your own first and no more complaining please. 🙂

Writer's Coin
6 years 11 months ago

I think it’s pretty obvious why people like to debate about this stuff instead of getting control over their own spending: it’s easier to talk and argue and get all worked up than it is to make changes.

It’s like having a philosophy debate: it’s great fun and intellectually stimulating, but at the end of the day it’s a whole lot of chatter and no action.

Jon
6 years 11 months ago
@John – As myself and others pointed out, Ramit is at best unclear and at worst dead wrong. I appreciate your comment and I think you make some good points; however, I don’t think they are the same points that Ramit is making. It would really help me if you could explain your synopsis/interpretation and how you arrived at it based on Ramit’s text. I think the problem is that Ramit has made two observations which are not necessarily related and made a corollation between them – some people complain about politics, and some people focus on external factors rather… Read more »
Swim Upstream to Wealth
6 years 11 months ago
I think Ramit’s point is don’t complain about something without taking action. There are millions of Americans who are blaming politicians, the Fed, evil Wall Street, the bankers, etc. for their precarious financial situation. However, they are not taking action to improve their financial lot in life. They are taking the victim route. Blame someone else for my problems and it justifies my current circumstance. Rather, we should strive to improve our position financially. Now, Ramit has caught some heat from some readers, and I think rightfully so, by saying we can’t control what is happening at the government level.… Read more »
Alison
Alison
6 years 11 months ago

@jon “I don’t think anyone expects the economy to be fixed immediately, but many are wise enough to know that the steps Obama is taking are only going to prolong the agony.”

I think the issue is nobody really knows what will or will not prolong the agony. There are economists on both sides of the argument.

Alison
Alison
6 years 11 months ago

@Swim Upstream to Wealth: If you go to http://wallstats.com/deathandtaxes/ and look at the poster of where all our federal tax dollars go you would not find one thing that is worth spending our money on?

Kevin@OutOfYourRut
6 years 11 months ago
The comments are going all over the place on this thread and it isn’t hard to see why, given the topic. But it seems the main thrust of the post is to take care of our own circumstances in a way consistent with what we would demand from the leadership in Washington (if we could demand anything of them). For those who are uncomfortable with the notion of abandoning politics–and from reading the post that doesn’t seem to be what Ramit is advocating–you might give a shot to getting more heavily involved at the local level, where it’s still possible… Read more »
Kiran
Kiran
6 years 11 months ago
I was reading this post the other day and had to calm down, but an NPR segment brought me back here because I think it’s a pretty good analogy. On the subject of healthcare, the author was arguing that every single person has great power over the state of our healthcare system simply by taking care of themselves. They weren’t saying that the healthcare system isn’t broken and doesn’t need reform, but that your own lifestyle has a far greater effect on the end result. Ramit is saying the same thing here. He’s not dismissing problems we should pay attention… Read more »
Terry
Terry
6 years 11 months ago

I am living on 106 percent of the federal poverty level, and 8 percent of that is paying down student loan debt – so I’m actually living on 98 percent of poverty.

Considering my debt is slowly declining – not increasing – I think I;m doing about the best I can with what I have, and there’s not much more optimizing I can do with what I have.

Tony D
6 years 11 months ago

Cool site. I like how you use youtube videos to teach. The site is tight.

Keep up the good work; I’m a newbie and need help with my site.

Thanks,

Tony

Dr. Nick Poulios
6 years 11 months ago
The issue of scale is a very important one. Hence, the 800lbs gorilla(s), such as health care, Fed budget, etc. need to be respected and fixed. However, you take Obama, his association with A-Corn (the ultimate federally financed porn/tax-evasion business) and all the extremists surrounding this president and what do you have? The ultimate plan for disaster! Nothing should be allowed to enter or exit Washington, no legislation, no health care bills, nothing! Until, we set up an independent prosecutor to come and clean house – all the way to the top! I am sorry to say that, if we… Read more »
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[…] proper rest, exercise, and reduce (and in some cases avoid) stress.  Why does no one do it? As Ramit Sethi says, “People love to debate minutae”.  We’d rather spend our energy TALKING about […]

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