Understanding Net Worth Essay
My net worth dictates the social class I fit in and my influence in that network. Net worth is also reflected by my social standing and ability to afford essential goods and services. The upper class dominates over lower classes, not just politically but also economically. High-income earners rule over the low-income earners, make policies that affect how available resources are distributed thereby influencing how I access those resources. The disconnect between the two classes leads to the hegemonic oppression of low-income earners.
Low-income earners have a low net worth. Nearly half the people at this income level spend 20 percent or more of their income on premiums and health care each year. According to Schoen et al., less than half of Medicare beneficiaries receive Medicaid assistance in the form of low premiums and shared costs. Prior research has shown extensive evidence of unmet care needs as well as financial hardship (2). As a low-income earner, I am unlikely to realize the purpose of Medicare. Woolf et al. note that the greater the income, the lower the likelihood of disease and premature death. Studies show that Americans at low-income levels are less healthy than those with higher incomes (1). The highest percentage of the money I earn is directed to other expenses. Therefore, funds for medical care diminish, which explains why high net worth individuals tend to meet medical costs better than I do. As such, a similar trend is likely to be observed on the health insurance front since my income is not enough to pay for health insurance.
My net worth does not allow me to have health insurance as most of what I earn is spent on basic items such as food, clothing, and shelter. According to Woolf et al., people with low income have restricted access to medical care, and are more likely to be uninsured or underinsured. They also face greater financial barriers to affording deductibles, the costs of medicines, and other health care expenses. Additionally, low-income patients are less likely to receive recommended health care services due to reduced affordability (Woolf et al. 4). Nyman and Trenz state that the notion of affordability and the role of health insurance in making health care accessible is central to the Affordable Care Act. However, research on the health policy is yet to estimate the extent to which insurance accomplishes this function (264). According to statistics, health insurance is a burden for at least 40% of people in the low-income bracket (Woolf et al. 4). The problem can be attributed to failure by policymakers, who have a high net worth, to provide low-cost medical policies or free access to health care services for expensive services such as cancer treatment. The relationship between net worth and power determines who accesses healthcare.
Given my low net worth, I am bound to suffer financial hardships in case of an emergency. I have only a little money set aside for emergencies. However, my savings cannot stretch far in case of job loss or illness. Maison et al. state that saving is an essential financial principle that ensures psychological security and boosts an overall sense of well-being. Although saving is an adaptive behavior, many people do not save at all (1). One of the ways of preparing for emergencies is setting funds aside as a precautionary motive. Kamarudin et al. observe that the purpose of emergency fund allocation among young adults was not only to cover their unexpected expenses and medical bills but to help them to travel and pay for their leisure activities (172). However, I travel and engage in leisure activities more often compared to the emergencies I am faced with. Therefore, without an assertive emergency fund plan, I would have no money for emergencies and would end up depending on high net worth individuals for help. The helplessness leads to increased dependency for me and others in the low-income class.
My monthly spending depends on consumer behavior. Greenberg and Hershfield assert that the extent to which consumers can control spending choices is a positive predictor of financial well- being (22). Ideally, the funds I consume are limited to my earnings. The amount of disposable income relates closely to my net worth. Therefore, spending is limited to essential needs within a month for 40% of people in the low class. Acquiring assets that require considerable funding is only achievable after I save over a long period. Hence, in case I spent irrationally, I would neglect some needs to fill the funding requirement of non-essential wants. Nevertheless, the quality of goods I purchase will differ from that of high net consumers, which accentuates the concept of social classes. For me to fit in the upper classes, my net worth has to increase to a level that can sustain keeping up with the dynamic trends of high net worth individuals.
Due to differentiation of social classes and based on net worth, low-income earners are oppressed. High net worth is associated with power and influence and is used to determine social class. Decisions by upper classes affect the lives of low net worth people. In sectors such as health insurance and Medicare, policies are made by rich people. Consequently, I am compelled to dig deeper into my pockets or risk doing without vital services. A comprehensive medical cover and emergency fund depend on one’s net worth. While expenditure solely depends on income, my ability to afford basic needs is often skewed negatively.
Works Cited
Greenberg, Adam Eric and Hershfield, Hal E. “Financial decision making.” Consumer Psychology Review, 2018, https://onlinelibrary.wiley.com/doi/epdf/10.1002/arcp.1043. Accessed 8 May 2020.
Kamarudin, Nur Shuhada, et al. “Why preparing an emergency fund is matter to young adults?” International Journal of Engineering & Technology, 2018, https://www.researchgate.net/publication/329442819_Why_Preparing_An_Emergency_Fund_Is_Matter_To_Young_Adults. Accessed 8 May 2020.
Maison, Dominika, et al. “You don’t have to be rich to save money: On the relationship between objective versus subjective financial situation and having savings.” Plos One, 2019, https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0214396&type=printable. Accessed 8 May 2020.
Nyman, John A., & Trenz, Helen M. “Affordability of the health expenditures of insured Americans before the Affordable Care Act.” American Journal of Public Health, 2016, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4815608/pdf/AJPH.2015.302958.pdf. Accessed 8 May 2020.
Schoen, Cathy, et al. “A policy option to enhance access and affordability for Medicare`s low-income beneficiaries.” The Commonwealth Fund, 2018, https://www.commonwealthfund.org/sites/default/files/2018-09/Schoen_Medicare_low-income_policy_ib_0.pdf. Accessed 8 May 2020.
Woolf, Steven H. et al. “How are income and wealth linked to health and longevity?” Income and Health Initiative, 2015, https://www.urban.org/sites/default/files/publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-Health-and-Longevity.pdf. Accessed 8 May 2020.
