Who Does the President's Personal Finances?
Despite being the leader of the free world, the president still has to pay personal bills, and many of them have opted not to pass off that responsibility to a financial professional. However, great diplomacy doesn’t necessarily mean great financial aptitude. In fact, not all presidents have been good at managing their money.
Transparency — Or Not
Technically, every president’s personal finances should be an open book because the Ethics in Government Act mandates public disclosure of earned and unearned income, as well as assets and liabilities. But there’s a catch. The Act has only been around since 1978, so the personal finances of presidents who served before that time are murky or even unknown.
How Much Does the President Earn?
An assessment of the president’s personal finances begins with the salary for serving as Commander in Chief. Since 2001, U.S. presidents have earned $400,000 annually, and must pay their own personal expenses from that income. The government covers meals at official events, however, and even wardrobe costs for official appearances (although President Obama did have to foot the bill for his own golf shorts).
So How Have Presidents Handled Their Money?
Not all presidents have been particularly savvy about their own finances. Bill Clinton frequently used credit cards when he was out and about, and Ronald Reagan reportedly always had ample cash on him. Barack Obama has whipped out cash to pay for his own Philadelphia cheesesteaks and books, but Dwight Eisenhower once had to borrow cash from his bodyguard to buy his grandchild a gift.
Maybe Eisenhower needed a financial advisor like Winnie Sun, cofounder of Sun Group in Irvine, California, to help him devise a personal budget. Sun recommends first having your employer pull a portion of your pay for your retirement savings. “Then pay your rent or mortgage, utilities, insurance, child care and credit card balances,” she says. “Take half of what’s left and put it into an emergency fund. What’s left is what you get to spend.”
Had William McKinley set aside emergency money like Sun advises, he might not have found himself in financial trouble four years before taking office. At that time, McKinley filed for bankruptcy protection, thanks largely to co-signing a loan for a friend whose business subsequently went under. Similarly, Harry Truman refused to file for bankruptcy to solve his financial woes when he depleted his entire inheritance by investing in a zinc mine that went toes up. Congress increased the presidential salary by $25,000 in 1949 to help Truman out.
President-Elect Donald Trump
And now comes President-elect Donald Trump, a man of real estate and reality TV fame. Trump announced in December 2016 that he would turn over the reins of his financial empire to his adult children during his presidency. He also promised that none of his companies would engage in any “new deals” during his term to avoid any conflicts of interest. So far, he’s said nothing about relinquishing his ownership stakes in those companies.
President-elect Trump may turn out to be one of the few presidents to turn control of his personal finances and business interests over to someone else during his term. But, of course, no one paid any attention to such things until the passage of the Ethics in Government Act of 1978.
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