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Was Living Well Easier for Your Parents?
By Christina Mulberry
Individuals who are over-extended, barely able to afford a home or new car, often say that it was easier in their parent's or grandparent's time to avoid debt and to have the necessities in life. It's certainly true that the cost of things was lower 20, 30, or 40 years ago. Afterall, in the 1950's and early 1960's you could potentially buy a very nice, brick, middle class home for under $10,000. Of course, they had to do this with a much smaller income as well. I grew up in the 1960's and 70's. In my case, my parents owned their own home, debt free. We had a three bedroom brick home that sat on 3 acres and had a built-in swimming pool. At the time, all of my friends who came from middle and upper middle class homes, marveled at the size of our kitchen, living room, and family room. My parents always had new cars and we never really wanted for anything. All of this, yet my parents never had any debt except for a couple of occasions. In one instance, they bought a home for my grandmother and in the other they opened a new business. These were not long term debts however. It's hard for most of us to imagine being able to live in a middle to upper middle class home, buy a couple of nice cars each year, and still have no debt. Some may be thinking naturally, that my parents had high paying jobs. Indeed my parents had good jobs. They were factory jobs. My parents were not lawyers, doctors, teachers, nurses, or even plumbers and electricians. In addition, they faced occasional layoffs just as we do today. By the time my parents reached their late 60's, they had a few million dollars in the bank and other investments. So how did things get out of hand such that this type of financial well being seems out of reach for so many average people? I'm not a trained financial expert and I will not judge how other people choose to spend or save their money. However, when I hear people uttering words that indicate our parents did better simply because times were easier, it just doesn't ring true with me. I'm not saying it's all our fault, I'm just saying that the cause isn't merely that prices have gone up or times have changed. My observation is that our expectations have changed greatly over the years. Some of this has to do with the availability of products and services and some of it has to do with consumerism and our own personal expectations as to what is a necessity. My parents for instance, knew their spending priorities. They valued a nice home, time with their family, a secure future for their children, nice cars, and financial security. They did not prioritize dining out, clothing, gadgets, bestowing their children with everything they desired, and so forth. Based on their priorities, there were many things my parents didn't have that most people are unwilling to let go of today. Few families today eat every meal at home as my family did except on rare occasions when we had pizza or something similar. The average home today probably has multiple televisions, versus the one we had until I was in my teens. When I was small, we also watched free programming with over the air signals versus paid programming with cable or satellite. In addition, we had to struggle through having only a single landline phone. If we left the house, we couldn't communicate with each other unless we stopped at a pay phone or called from a friend's house. Even as teenagers we rode the school bus, as my parents didn't provide a car despite the fact that about half of my friends had one. My parents' priority was that their children would go to college. Thus, we received no car, no phone or TV of our own, no summers at camp, no big graduation parties or anything like that, but on the other hand, we received a four year degree instead. As I think through these and dozens of other items, I realize that there were many expensive products and services that we use today, that my parents didn't have to pay for as they weren't yet around or they opted to forgo due to their priorities. As they didn't have monthly cable, internet access, or cell phone bills, they could focus their resources on the things they wanted. Expectations regarding a nice home have changed as well. The house where I grew up sold for about the third time just a couple of years ago. I saw it in the newspaper. Much to my amazement it was listed as being 1500 square feet in size. As astonishing as it may seem, a family of five often lived in homes of this size, and smaller, very comfortably. But expectations have changed. Model homes now have granite counter tops, professional, restaurant style stoves, a bathroom for each occupant, walk in closets in every bedroom, and so forth; all contained within a mere 2,000 to 3,500 square feet. My parents enjoyed vacations immensely. However, our vacations weren't extravagant. We loaded up our car, stayed in inexpensive motels, and had the time of our life. We didn't fly and we didn't have an RV. Our cars were nice but again, we fit five people in a sedan. It wasn't an SUV or a van. Weekend excursions might be a trip to a state park for a few dollars, a bike ride, or perhaps a visit to a nearby city for sightseeing. Going to a movie was rare, and when it happened, it was a matinee or the drive-in where we could take our own food and drinks along. Shopping for clothes happened probably three times per year and maybe one additional time for a special occasion, but it was never a leisure activity which would entice us to buy more. This description of my parents style of living has nothing to do with describing hardship. It's about how they identified their spending priorities and stuck to them. It's about how their financial wellbeing and quality of life was not based upon having it all, but having what they wanted not what others told them they needed. They avoided debt not just because things were less expensive, but because they didn't pay for many of the products and services that many of us currently feel compelled to have. The important point here, is that if we're able to set our own priorities and eliminate the things we identify as less critical just as my parents did, the result may have the same positive effect on our financial situation, just as it did 40 years ago. The difficulty will be parting with our concept of what we should have or what our expectations should include. Not long ago, I read an article about a couple who had cancelled the health insurance on their family of five. They wanted to save the money so that they could continue to enjoy a higher quality of life; a life that included cable TV and a new SUV. Although this is certainly not the way I would prioritize my spending, at least they recognized that they were making the choice between healthcare and advanced education for their small children, and having plenty of TV entertainment and a larger vehicle. Hopefully, they won't mistakenly think that people like my parents "made it" because times were simply easier. |
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This intel was contributed by mulberry
mulberry
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February, 2012
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