Disturbing financial statistics

[dvcgirl]

No, median household is 60k. The link is earlier in this thread. Its actually $65,093. It isn't a ton of money, but it should be enough for a family of four to live comfortably, without debt, and save for retirement. Except perhaps in very high cost of living areas, but then the median income tends to be higher... (Californias is almost $68,000, Connecticutt and New Jersey are around $86,000-87,000!) Bottom end is Missisippi and New Mexico - around $45,000. And provided they don't have unusual unavoidable expenses (medical bills) or fall into the trap of consumerism.

I think DisFlan was talking about her county in particular...

 

[crisi]

I think DisFlan was talking about her county in particular...

Thanks, sorry DisFlan, misread your post.

 

[dvcgirl]

I've seen these statistics (and similar ones), and that's what convinces me that it IS possible to make it as a one-income family IF we're willing to live like people did a generation ago. My dad was a CPA and my mom was a SAHM. Here's what my 1960s-1970s childhood was like:

We lived in a three-bedroom house: 2 girls in one bedroom, 3 boys in another, mom/dad in another. Living room, dining room, kitchen -- no den, no basement, no sun room -- just the basic living areas for a family of 7. We all worked in the garden, and we raised chickens for eggs and meat. Our standard drinks were tea and lemonade; soda was a treat and was usually reserved for birthdays, etc. We hung clothes on the line. I do not remember ever going to the movie theater with my family, and a trip to the mall was a rarity (most often we went in the summer to "soak up the air conditioning", which we didn't have in our own house). In the summer, mom took us to state historical sites (free) and dad took us camping in our own woods. We could go to a pool in my grandmother's subdivision for free; we always packed sandwiches and a jug of Koolaid for lunch. My mom made many of our clothes (especially dresses for us girls). At any given point in time, I owned two pair of shoes: tennis shoes and church shoes. Usually I had plastic flip-flops for summer too. I usually had 3 pairs of school jeans every fall, and they were cut off into shorts the next summer. We went to the library every Tuesday and were allowed to check out as many books as we wanted, but we rarely visited the book store. We had two cars -- both old, not "used" but OLD. We had bikes and a few dolls, but no electronic toys and no toys that requried batteries. We had a coffee can full of crayons, mostly broken nubs -- the Easter bunny brought new ones once a year -- and plenty of paper but store-bought art kits were unknown. A birthday party meant a special meal chosen by the birthday child (probably with the grandparents invited) and a mom-baked cake; I never had a friends-invited, treat-bags given type party. My parents went out to dinner 1-2 times per year. Every summer we rented a house at the beach together with all the cousins; kids had to sleep on the floor.

How many families live like that today? I suspect not many. I don't, and as a result, I pay more than my parents did. If I were to make the same choices they did, I have no doubt that I could make it on one income.

Wow..a very frugal childhood, but sounds an awful lot like mine...lol! Family of five here...three girls, all lived in a 3 bedroom 1,000 sq ft house. My parents still own that house. I didn't have my own room until my older sister went off to college. I remember getting a TV for my room when I was 14. I remember it so well because I purchased it with babysitting money.

We were lucky in that we lived near the beach, and we spent many, many summer days there. When we were teens we got jobs at the Boardwalk....and once we had jobs we paid for our own school clothes, entertainment and expenses (like cars, insurance, that kind of thing).

We also had a community pool and my Mom packed lunch and jug of iced tea. But other than Brownies when we were very young, there weren't any other "paid for" activities for us...no dance lessons, gymnastics, karate, on and on and on.....we played sports in school or joined free school-related clubs. I just read recently that there is a new trend coming out...."Kid Gyms"...parents all over the country are signing their kids up. When I was a kid we just ran around outside...it was free...lol.

We did have BD parties with friends invited, but it was just a cake and maybe a little candy bag for the kids. Nothing like the lavish events that some throw for their kids these days.

We also hung our clothes out to dry, and my parents just had AC installed in their house about 5 years ago.

 

[DisFlan]

No, median household is 60k. The link is earlier in this thread. Its actually $65,093. It isn't a ton of money, but it should be enough for a family of four to live comfortably, without debt, and save for retirement. Except perhaps in very high cost of living areas, but then the median income tends to be higher... (Californias is almost $68,000, Connecticutt and New Jersey are around $86,000-87,000!) Bottom end is Missisippi and New Mexico - around $45,000. And provided they don't have unusual unavoidable expenses (medical bills) or fall into the trap of consumerism.

dvcgirl is correct. The national family median may be $60k, but it is NOT that much in the county where I live. Our family median income here is less than $28,000. It's less than $14,000 per capita. I know dozens of single moms who are raising kids on that $14,000 a year. Or less. They'd be THRILLED to get the national "average" median income - or anywhere even close. A big "consumerism" splurge for them is a 12-pack of Coke.

DisFlan

 

[MrsPete]

Wow..a very frugal childhood, but sounds an awful lot like mine...lol! Family of five here...three girls, all lived in a 3 bedroom 1,000 sq ft house.

I remember getting a TV for my room when I was 14. I remember it so well because I purchased it with babysitting money.

I just read recently that there is a new trend coming out...."Kid Gyms"...parents all over the country are signing their kids up. When I was a kid we just ran around outside...it was free...lol

Our house was a little bigger -- I'd estimate 1600 sf -- but it was small with five children.
We had one television in the living room: a big color console that was like a piece of furniture. Of course, no one had cable TV or DVDs back then. My parents didn't even have a TV in their bedroom.

I'm sort of iffy on the idea of kid gyms and free-based kid activities. On the one hand, they do look wasteful compared to our be-back-by-dinner childhoods; however, it's just not safe to allow kids to roam the way we did.

When I was a kid, we were all in scouts (an activity which is very inexpensive even today). My mother forced me to take dance and piano for 2 years each, but they weren't like today's kids' classes. My dance class was in a SAHM's basement and cost $2/week. When it was recital time, someone's mom made little elastic-waist skirts (red/white/blue print for the bicentennial) to go over our everyday leotards. Our dads wore suits/ties to the recital, which was held in the elementary school auditorium, and our moms took snapshots using their instamatic cameras with pop-off flashes; if anyone had suggested professional photographs, I'm sure my mom would've looked at them like they had two heads. Likewise, my piano lessons were in a lady's house and they also cost $2/30 minute lesson.

 

[perdidobay]

I've seen these statistics (and similar ones), and that's what convinces me that it IS possible to make it as a one-income family IF we're willing to live like people did a generation ago. My dad was a CPA and my mom was a SAHM. Here's what my 1960s-1970s childhood was like:

We lived in a three-bedroom house: 2 girls in one bedroom, 3 boys in another, mom/dad in another. Living room, dining room, kitchen -- no den, no basement, no sun room -- just the basic living areas for a family of 7. We all worked in the garden, and we raised chickens for eggs and meat. Our standard drinks were tea and lemonade; soda was a treat and was usually reserved for birthdays, etc. We hung clothes on the line. I do not remember ever going to the movie theater with my family, and a trip to the mall was a rarity (most often we went in the summer to "soak up the air conditioning", which we didn't have in our own house). In the summer, mom took us to state historical sites (free) and dad took us camping in our own woods. We could go to a pool in my grandmother's subdivision for free; we always packed sandwiches and a jug of Koolaid for lunch. My mom made many of our clothes (especially dresses for us girls). At any given point in time, I owned two pair of shoes: tennis shoes and church shoes. Usually I had plastic flip-flops for summer too. I usually had 3 pairs of school jeans every fall, and they were cut off into shorts the next summer. We went to the library every Tuesday and were allowed to check out as many books as we wanted, but we rarely visited the book store. We had two cars -- both old, not "used" but OLD. We had bikes and a few dolls, but no electronic toys and no toys that requried batteries. We had a coffee can full of crayons, mostly broken nubs -- the Easter bunny brought new ones once a year -- and plenty of paper but store-bought art kits were unknown. A birthday party meant a special meal chosen by the birthday child (probably with the grandparents invited) and a mom-baked cake; I never had a friends-invited, treat-bags given type party. My parents went out to dinner 1-2 times per year. Every summer we rented a house at the beach together with all the cousins; kids had to sleep on the floor.

How many families live like that today? I suspect not many. I don't, and as a result, I pay more than my parents did. If I were to make the same choices they did, I have no doubt that I could make it on one income.

You just described my childhood to a t. Are you my sister? lol!
I think this was a typical household in the early 60's.
Few if any people are willing to live this way these days to be debt free. The real problem is few are willing to even be a little frugal to be debt free!

 

[nbodyhome]

Speak of the devil. As I logged on to view my credit card statement this month, I saw that this month they doubled my credit limit. Unbelievable. When will these companies just STOP?

You can ask them to stop. I told Discover not to up my limit anymore without my requesting it (as it's at nearly $10,000 anyway, I don't see my doing that in the future).

Denise

 

[MrsPete]

You just described my childhood to a t. Are you my sister? lol!
I think this was a typical household in the early 60's.
Few if any people are willing to live this way these days to be debt free. The real problem is few are willing to even be a little frugal to be debt free!

Yeah, we were typical for our area and the timeperiod. All five of us turned out well.

I don't live that way today -- neither do any of my siblings. I chose to work and to have fewer children, both decisions which make a huge difference in our lifestyle. My children don't have anywhere near what today's "average" kid has, but they have way more than I ever had. I worry sometimes, however, that they have way too much.

 

[DiznEeyore]

Also, I just wanted to point out again, your final paragraph mentions the comments about intelligence and motivation. Most of your post addresses my comments, but those particular comments were NOT made by me. I don't want folks who haven't read the whole thread getting the wrong idea about my opinion.

Steve, I tried to make that last paragraph separate from your comment, as you've never been insensitive in that regard. That's why I said "for someone else to imply" .....

I chose the quote I did from your original post because there are so many "financial advisors" that make it sound like anyone in difficult straits is there due to fiscal stupidity. That is definitely not always the case and I think that needs to be repeated, especially around here.

 

[nbodyhome]

I do agree that many people are making choices which put them over the edge financially. Overall, our country does have more "stuff" - larger "stuff", and we travel more than we used to. I am someone who loves to travel, and save my portion of the money we each get out of our account to do things like Europe, and Disney (though I won't generally spend much on Disney hotels - not because I live close, but because I'd rather spend it in Europe!)

While doing this, I scrimp on other things. I wait for major sales/clearances for clothes (I bought 3 pairs of pants this year at Bells Outlet for less than $10.00). We don't eat out often. I plan to spend my 40th birthday (within a couple of weeks of it) in Paris, and it will take until September to save for it.

I do believe that we pay a higher percentage of taxes now than our families did in the past. I am not quite sure what will happen with so many people getting SS in the near future. I don't plan for social security - it's really a crazy system, I'd rather see it privatized. Hopefully it doesn't break the backs of those who are paying in, but I am not planning for it for the future, I want to make sure we have enough when we retire in a 401K, in a house, in other money vehicles. It is a heck of a lot more important to make sure you are covered financially for the future than to buy more stuff.

You know, it really comes down to just watching the pennies. I have a relative who has declared bankruptcy, but I see her buying all kinds of stuff - even like Bath and Bodyworks soap for her bathrooms. I buy the huge bottles from BJ's or Sams...it is just one little way of saving money. The pennies saved add up to dollars, and the dollars into hundreds or thousands of dollars.

 

[HaleyB]

I was the one that asked for the numbers , intresting but I still have questions. First off you are looking at 'average' an awful lot. Because of the concentration of wealth in the last 70 years average can be very misleading. Actually 'average' is just a misleading way to look at things. As someone else pointed out it is 'mode' we should talk about if we want to talk about most people. I understand this is not a debate and it is easier to use commonly understood terms, but I did want to point that out.

You say the average home is twice as big as it was in 1950. I will buy that. What percentage of families live in a house they own (not renting)? Is that number up or down?

So many more Americans visiting foreign countries might be explained by the increase in population and the avaliability of quick transatlantic flights. Europian vacations do not need to cost more than staying in the US on vacation.

I would agree the cost of food is down over all. I also agree eating out is a huge problem for American wallets and waistlines. But todays familiys struggle with expenses my parents never faced. Medical costs is number one on the list. There are other things too. Look at what has happened to the cost of a University education.

Last of all you are older than I thought My parents were not buying a home in 1950. I was looking at 1970 to present day, my parents bought their first house in 1968. My parents paid much less as a % of income to live in a house that was only slightly smaller than the one I live in now (and they had a basement, we don't). They owned two cars and we went on a family vacation every year for two weeks.

Consumption is up and it botters me all the time. It keeps people from saving and it is horrible for our planet.

The following information was published in a national monthly financial magazine a few years ago. I don't have the sources for the specific data anymore, but you'll have to trust me when I say I did have the sources when I wrote the article. And I realize that this info is now a few years old but I don't believe things have changed much since I published this:

The average home is twice as large as in 1950, but the average family is 13% smaller. Fewer people are demanding much more space.

Purchasing the average new car today requires fewer months' worth of family income than it did in 1950. The number of cars per adult is 50% higher than it was then. Years ago, it was not uncommon for a husband and wife to share one car. Today, both spouses likely have a car and often, licensed children do, too.

In 1960, Americans spent 15% of income on groceries vs. only 7% today. Our real downfall is eating out. In 1990, 42 cents of every food dollar was spent in restaurants, double the amount spent a generation ago.

Every year, more than 16 million Americans visit foreign countries. In 1950, the number was 680,000.

The average American consumes twice as many goods and services as he/she did in 1950 and ten times more than in 1929.

As a nation, our standard of living has continued to rise and that does bring with it added costs. But when we look at our parents' or grandparent's generation and what things cost then, we simply aren't comparing equal lifestyles. If you are willing to live in the manner in which your parents or grandparents lived 50 years ago, you could get by on far less money and direct a lot more of your income to savings.

Steve I agree with everything you are saying, what I am not so sure about is what you think of as 'average'. You and I are not this 'average'. Half of the adult population has only a High School education or less. I think we both fall into the top 5%, with more than B.A./B.S. under our belts. We, I can assume, both fall much higher up the income scale too. Yet I am sure what disturbs you is how many of your peers fall into the cc debt/no savings trap. Me too.

I think the really sad thing about consumer debt is that the people ruining themselves with it are often high earners or the very young. Somewhere along the way in this thread I think we got off topic.

1. Over the past 10 years, credit card debt among 18- to 24-year-olds has risen by 104%.

2. Only 56% of US households have any type of savings, while 44% have no savings at all.

3. 32% of households headed by someone aged 65 to 74 were carrying home mortgage debt as of 2001, an increase of 26% from just 3 years earlier.

4. Nearly 60% of households in America with children under age 18 and over half of those nearing retirement depend on their latest paycheck to meet expenses. That also includes one third of workers earning $75,000 or more.

Those are scary numbers.

 

[crisi]

Here you go, homeownership rates steadily climbing:

http://www.census.gov/hhes/www/housing/census/historic/owner.html

And, no, don't look at mode for most people. Median is actually where you want to be for this stuff. Mean (what you learned in high school as "average" skews far too easily - i.e. Bill Gates pulls up the mean. But mode is practically useless.

 

[HaleyB]

I don't live that way today -- neither do any of my siblings. I chose to work and to have fewer children, both decisions which make a huge difference in our lifestyle. My children don't have anywhere near what today's "average" kid has, but they have way more than I ever had. I worry sometimes, however, that they have way too much.

I had to laugh reading this. My kids also have way more than I ever did as a child and much less than most of their friends. I also worry that they have too much. However right now my two youngest are playing with sticks and tinfoil and having a blast.

 

[HaleyB]

Here you go, homeownership rates steadily climbing:

http://www.census.gov/hhes/www/housing/census/historic/owner.html

And, no, don't look at mode for most people. Median is actually where you want to be for this stuff. Mean (what you learned in high school as "average" skews far too easily - i.e. Bill Gates pulls up the mean. But mode is practically useless.

Thanks crisi, I never was good with those terms. So mean is another term for average and median was what I was thinking of, right? I think I better go look at wiki or google this and get those terms straight in my head.

I am glad to see home ownership on the rise. I wondered about it as prices are so much higher in my city than they were 7 years ago.

I think it is interesting to read this thread. I am learning a lot. See, my Disney addiction is educational Steve starts great threads.

 

[imsayin]

Too much money these days is spent on things we never had in the old days - cell phones, internet access, etc.

I went to Sprint yesterday because DH had a broken phone. I had a $150 credit toward a phone purchase. There was a really cute pink phone I liked. With my credit, the phone would have cost only $39.99 (boy was it cute). The sales clerk was totally shocked that I declined to get the phone, as if she had never seen anyone do that. She wanted to know why. I told her "My phone works fine, I don't need to spend $40 on an unnecessary purchase".

I think too many people get caught in getting phone upgrades, car upgrades, etc. I am just too practical, which leaves me debt free on one income for the 4 of us (except for my mortgage).

 

[dvcgirl]

Too much money these days is spent on things we never had in the old days - cell phones, internet access, etc.

I went to Sprint yesterday because DH had a broken phone. I had a $150 credit toward a phone purchase. There was a really cute pink phone I liked. With my credit, the phone would have cost only $39.99 (boy was it cute). The sales clerk was totally shocked that I declined to get the phone, as if she had never seen anyone do that. She wanted to know why. I told her "My phone works fine, I don't need to spend $40 on an unnecessary purchase".

I think too many people get caught in getting phone upgrades, car upgrades, etc. I am just too practical, which leaves me debt free on one income for the 4 of us (except for my mortgage).

Yes, all of that stuff adds up....all of those extra monthly fees that people didn't have a generation ago. We live in a world now where it's not unheard of for a 10 year old to have a cell phone...by 14 nearly all kids seem to have them. One of our friends is buying her 13 year old DD a Blackberry for Christmas. I had to laugh.....wait until she has to have a Blackberry for *work* and not for e-mailing her friends. They're not nearly as much fun then

 

[mickeyfan2]

And many people are using their homes as ATM so they can live above their means. Thus the high rate of refi and repeating of refi every few years by many.

 

[DMRick]

I'm guilty. I'm getting a cellphone for my soon to be 13 year old granddaughter. I'm paying for the phone and the first card. I think this will be a real eye opener for her, because I could just add her to my phone, but then she'll have no sense of cost/responsibility. So I think she'll be asking for lots of phone cards for her birthday and other occasions, unless she quickly figures out that the phone hanging on the wall is a much better thing, than all her money going for cell calls. I suspect it won't be long, til the phone is set aside, and maybe used just for emergencies.

 

[Debbie]

I've been finding the conversations very informative. I agree that many people today are struggling, often in the attempt to have what others have....or have what is seen in the television commercials and the daily advertisements that land at our door. All this exposure to things has blurred the line for many between wants and needs.

Financial education is needed for children...probably from the beginning of their school careers, not waiting until the end-when those credit cards come calling, all by themselves.

I was never taught about saving for retirement (and that would have been decades ago). Luckily, my job will provide me with an adequate pension. Added to that is a small RRSP, and the spousal RRSP that I have been putting away for years for DH. I just wish that I knew at 25 what I know now, at 50+. There would have been a lot more money saved.

For Christmas, my oldest 3 will be receiving The Automatic Millionaire, along with a chat with mom. Two will listen, one will not. He is the one who argued when I 'took' half of his paycheck and put it in ING as a teenager. He is also the one who actually has more money than he knows. lol

 

[BettyCv]

I don't live that way today -- neither do any of my siblings. I chose to work and to have fewer children, both decisions which make a huge difference in our lifestyle. My children don't have anywhere near what today's "average" kid has, but they have way more than I ever had. I worry sometimes, however, that they have way too much.

I assume you are talking about your childen having more "material" things than you had...