I’ve wrote posts about this topic before on Reddit a few times.
There’s truth to the idea that it’s much harder to start a life in the world today than it was fifty years ago, homes are more expensive and wage growth hasn’t necessarily kept pace with inflation over the last fifty years, adding to the fact that less and less Americans live in low CoLA cities means the American experience is even more skewed than it was 50 years ago. Setting that aside though, we also spend our money far differently than we did before, and many would say far less efficiently.
We have all of these relatively modern pulls on our disposable income that didn’t exist before. Keeping up a household in the 50s usually meant 2.5 kids, a family car, power and water bills, a television, etc. we have all that today, but also modern technology expenses: cable/sat subscription, cellphones, multiple TVs in most households, cars for each parent, internet bill. Just these extra things we see as necessities now eat up a huge chunk of the average American’s disposable income. We also buy things much differently than we did 50 years ago. Americans used to save huge amounts of their disposable income, and often paid cash for things. Credit was much harder to come by so you had to be frugal and delay gratification if you wanted that new TV or car. From my research, homes were one of the few things people financed, and revolving credit was very very low, with fairly low interest because it was so hard to get in general. Today we finance our lifestyles with revolving credit and are paying huge amounts of interest, while also rarely keeping a sufficient savings rate to be able to break that cycle.
The next big difference is how we live. 50 years ago the average American didn’t eat out very much at all, you cooked food at home every night from either fresh or frozen ingredients, and you generally were eating fairly inexpensive domestically available products. In modern times we all eat out multiple times a week, and have largely outsourced the role of food preparation to other people. When we do eat at home, many Americans opt for fancier fare, with exotic ingredients, or we keep expensive dietary habits. We also spend money on things like fancy coffees and convenience food that wouldn’t have happened much before. This has greatly increased the proportion of disposable income spent on food in the American household significantly over what was spent in the fifties.
So while the American experience has definitely changed, if you were to live like people did fifty years ago, you’d probably be surprised at how well you could live.
Credit, technology, and lifestyle has had a huge impact on the average American and it largely flies under the radar in these discussions. The beauty is, you can largely make a choice if you want to let them keep impacting your life.