By Kevin Craig, Matzav.com
Typically, when some think about the 1950’s and compares it to today they think about how happy and care free people were. The biggest question that people have when comparing then and now is whether the people were happy then than they are now. After all, today there are better paying jobs and people are able to support their family with a large income. Unfortunately, with the better paying job and the larger income prices have also gone up. In addition to the rise in prices people are also spending a great deal more than they were in the 1950’s. In fact, according to the Bureau of Labor Statistics Americans are spending ten times more money than they were in the 1950’s. This is partly to do with the fact that the prices have gone up; and that Americans today need more to live on (or at least they think they need more to live on). Technically, there are three main areas (according to a United States Census of 2007) that are responsible for draining people’s wallets.
In the 1950’s housing only accounted for a little over 20 percent of what the average American family spends. Today, a little over 40 percent of the average American family’s income goes towards housing. The reason for the 20 percent jump is the fact that the average family household size has doubled since what was considered to be average in the 1950’s. The houses of today have more bathrooms, bedrooms, and closets. Furthermore, the individual rooms in the houses of today are also a great deal larger in size.
Entertainment, Education, and Communication
In the 1950’s only about two percent of the average of what the average American family spends was used for education, communication, and entertainment. Today, nearly 15 percent of what the average American family spends goes towards entertainment, education, and communication. This has a lot to do with costly expenses such as Internet, phone fees, and more. The fact that items such as cell phones have become a necessity also plays a huge role in why we spend so much more today. Americans didn’t spend nearly as much in this category because a lot of the entertainment, education, and communication luxuries that we have today just didn’t exist in the 1950’s. After all, they couldn’t spend money on things we didn’t have.
Interestingly enough, transportation is not that much more expensive now than it was in the 1950’s. In fact, it cost approximately 15 percent of the total earnings in 1950 and today it accounts for almost 20 percent. This is because the need to get from one place to the next is just as important now as it was then. While gas may be more expensive the price of a car is actually a great deal cheaper than it was back then. For that reason it is fairly common for a family to have more than one vehicle today. In the 1950’s families who had a vehicle (especially if they had more than one) were considered to be a family of money.
Ironically enough, it is the little things that have developed to make our lives more convenient that our actually costing us more money.
Kevin is a financial expert and writer, whose works appear regularly on Matzav.com He recommends http://www.cambist.co.za/ for those looking for high monthly returns.