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April 06, 2012

Consumer Spending, Then and Now

Whilst working all night toiling away, cramm'd with distressful bread, the Blog Princess stumbled across some very interesting comparisons of how the average American spent his money in the 1940s and now.

The first one is particularly amusing, given all the perfervid peroratory regarding how much worse we have it than our parents did (and how Joe Sixpack is doomed to a life of penury unless Uncle Sam redistributes all those unearned pie slices in a more "equitable" manner):

spending.png

Two thoughts leapt into our pea sized brain:

1. On the major expenses, it looks like rather a wash to us. The crushing burden of modern health care spending seems to be more than compensated for by dramatic decreases in spending on two of the three basics (food and clothing). Housing spending, despite similarly overwrought rhetoric and fearmongering, doesn't exactly seem to have gone through the roof either, at least by these numbers.

Another look at the same information comes up with larger increases to housing and transportation, but then we're also getting much more:

The jump in spending on housing between 1949 and 2011 is also striking. It's worth noting that people are buying (and renting) much bigger homes today. In 1950, the average new house was less than 1,000 square feet; in 2000, the average new house was over 2,000 square feet.

The rise in spending on transportation was driven by the spread of cars. In 1950, there were only three vehicles for every 10 Americans. By 2000, that had risen to eight vehicles for every 10 Americans.

2. According to this graphic, Americans spend as much on Entertainment as they do on Health Care (yet no one is screaming that the cost of Entertainment is crushing our souls):

wheredidthemoneygo.jpg

It is a puzzlement. Friday debate question: how many of you have fewer material possessions and live in a smaller home than the one you grew up in?

Posted by Cassandra at April 6, 2012 07:41 AM

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Comments

A debate, it's Friday, please oh please, enough homework already. The short answer is yes and yes. But, it's by my financial nature more than anything, I suspect.

Cheers, and have a good weekend.

Posted by: Allen at April 6, 2012 03:09 PM

You too :)

Posted by: Cassandra at April 6, 2012 03:16 PM

Friday debate question: how many of you have fewer material possessions and live in a smaller home than the one you grew up in?"
Not yet. The empty nest is prodding us to address those points, but the Milburn Drysdale gene is preventing me from selling my real estate in the current market.

With a newly elected U.S. Congress and Executive composed of individuals with a but a modicum of knowledge of and experience in our economy, I expect that we shall soon be singing Happy Days Are Here Again.

Now how's that for positive thinking?

Posted by: Norman Vincent Peale at April 6, 2012 03:42 PM

Seconded, not yet; although nominally, I grew up on 30 acres and now live on less than one, the farmhouse was probably bigger than current city digs in square feet, and there are four here vs. seven (eventually) when I showed up.

Material goods is also questionable; I THINK I have less, but it takes a lot of stuff (tractors, storage sheds, tools, workshop, etc.) to keep even a non-working farm from disappearing into the overgrowth; I used to spend six or eight hours at a time, once or possibly twice a week, on top of a tractor with a bush hog to keep the grass reasonably low on the ten-plus unwooded acres we approximately wandered around on. Other tasks (exterminating bugs, gardening, school, Boy Scouts, band / chorus, repairs) called for even more Material Goods; I still have some repairs and so forth, but smaller digs require less gear to keep it running.
If you count it all up, I have fewer things to keep fewer people happy; I still have a lot of things, and would wish fewer (keep your accounts on your thumbnail, and simplify your life). But I love tools, electronics, time / labor - saving appliances, backup / emergency equipment, gardening, and the occasional new-thing-just-to-have-something-new-to-play-with; engineering is something of a contagious disease that way. Do good intentions count?
Jim

Posted by: Jim at April 6, 2012 04:14 PM

"Do good intentions count?"

As long as you're not in the road buildin' bidness...

Posted by: Snarkammando at April 6, 2012 04:24 PM

Not sure I can answer that completely....yet. Live in a smaller house? Yes, but that's mainly because, since we haven't had any control over where we've lived, we rented what we could get with the BAH for that area.
As for material goods? Yes, but again a caveat since I recently aquired the vast majority of my parent's possessions on top of what I already had.

Posted by: DL Sly at April 6, 2012 04:34 PM

Yes.

RBBH and I don't need all that our parents had or wanted, and so we get by with much less.

We could be like a lot of jackalopes who buy and use more than they could afford, but we don't. We live a little lower than we could because we like to have the extra capacity in case of bad times.

But I know that's not what you meant.

Posted by: ry at April 6, 2012 05:14 PM

We have more stuff, and a house about the same size for two people, while theirs was for five.

The switch from spending money on food to spending it on healthcare is funny, since so many of our health problems come from the excess of food.

Posted by: Texan99 at April 7, 2012 01:01 PM

We have a smaller house, and far fewer possessions; and more to the point, fewer services. They had much better health insurance than we do, for example; and we gave up cable TV back in 2004. Their benefits and other employment-related guarantees are better than anything I've ever been offered; those kinds of things, outside of government service, were privileges of an earlier generation.

My wife and I have both higher educational degrees, too; but the kind of jobs there are today aren't as good as the ones that used to exist. They lack security, and more and more, they lack benefits and wages also.

Posted by: Grim at April 7, 2012 11:07 PM

Yes and yes, but in our case it's because we haven't yet started a family (we're looking for a house currently, as a matter of fact.) When we do buy one, it will probably be smaller, but I think that's generally the case with first homes.

Posted by: colagirl at April 8, 2012 07:06 AM

House is a little smaller and has a larger, steeper yard with many more trees; that house was much better designed and built. Inflation ... that house cost ~$25k to build in '52; my parents sold it and the land for ~$150k in '65 (about what we paid for this house in '95); that house was last sold, a couple of years ago, for ~1,200k (close to the peak of housing prices.)

Employment, benefits, conditions, loyalty, ... are all worse than when I graduated from high school in '65. We have more things, of some kinds (Spice and I are both bookworms), and fewer of others (cars; we're down to one and will probably stay there, renting if we need a second or special purpose vehicle.)

Posted by: htom at April 9, 2012 01:28 AM

Growing up, 1965, age 10:
Family of 5, 1 station wagon, 1 very small sailboat, small house.

1985, age 30:
Single, 1 old (1966) car, 1 large old house (1905), almost no stuff.
2010, age 55:

Family of 3, 5 cars, 1 small sailboat, medium house, far too much "stuff" in my opinion.

Posted by: tomg51 at April 9, 2012 09:26 AM

Dream world:

Small cabin on mountain lake, one small sailboat, most possessions are family heirlooms, small pick-up truck, one cat.

Posted by: tomg51 at April 9, 2012 09:44 AM

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