Even with inflation in 1970. It only took 1 worker

Discussion in 'Economics' started by KINGOFSHORTS, Feb 25, 2009.

  1. Hmm, lets delve more deeply into this idea that one can lead a 1970's lifestyle on one 30k salary for a small family of 4. 30K would be about 2500/month. Lets lop off maybe 400 for taxes, so $2100/month.

    Lets deduct monthly expenses: rent $775, gas/electricity/water/basic telephone $150, groceries $600 (that's about $5/person per day, before you start slamming me), gasoline for our one car $80 (as long as oil prices stay down anyway), car payments/maintenance for our one automobile, $200 (I haven't had car payments that low since my very first new car, a 1995 sentra with no heat/air) health insurance $200 (thats pretty cheap considering many employer health plans don't help out much with dependent coverage)....

    Well we're up to about $2000/month expenses already, and we haven't made any contributions to any retirement plans, put any $$ away for kids educations, we haven't purchases any incidentals like soap, shampoo, clothing, etc. and hopefully we were able to furnish our apartment previously with yard sale stuff. And not one damn thing has broken and needed to be fixed or replaced.

    I would love for someone to shoot holes in my shoestring analysis, because I'm actually starting to depress myself.
    #41     Feb 25, 2009
  2. Thinking that the 1970 family was so well off is a myth. My father was a programmer/manager. He did work for his company for 30 years and had a decent pension, unlike jobs now. Parents had a few kids - it is expensive!

    Yes there was inflation, but the salaries rose with it.

    Owned modest home in suburb. One car. They did NOT pay for our college education. They did NOT send us to private school or have daycare of any kind. Some hand me downs or shopping at Good Will (mom loved a bargain). Mother used a lot of coupons. OCCASIONAL meal out, nothing fancy - pizza or diner.

    Summer church camp - cheap and occasional. Nice trip once every 3 years by car and popup camper to other coast.

    We got by, like most of our neighbors.
    #42     Feb 25, 2009
  3. You are right of course TraderZones. My parents raised 6 kids during the 60's and 70's mostly on one income. My father was self-employed so we didn't have company-sponsored health insurance or pensions. In fact, I'm pretty sure that for the most part, we just had to roll the dice when it came to health insurance and pray that no one actually became sick or injured to the degree of requiring an extended hospital stay. I only remember one family "vacation" during my childhood, a camping trip within one day's driving distance.

    We certainly couldn't have splurged on cable tv had it been available, or cell phones, pc's, or eating out more than once a month or so.

    I agree with Makloda that people would be better off living within their means, whatever that may be in their particular circumstance. I have and use credit cards as a convenience, but I don't believe in charging anything that I can't pay off next month.

    I also agree with some of the other posters that with all the supposed advances in technology/productivity, the average person doesn't seem to be that much better off than his parents.

    Perhaps all those advances in productivity went toward the creation of millions of service sector "mcjobs" that didn't exist in the 70's. If/when we do all stop partaking in those wonderful services, how bad will things get? I'm thinking depression-type unemployment or worse...
    #43     Feb 26, 2009
  4. My parents are 74 and 82 years old respectively now. Being homeless, chewing tree bark and a leather belt for dinner in 1940s WW2 Europe works wonders on what you expect from life.

    In the 60s and 70s, my parents:

    - never ever ate out. "Only money wasting idiots eat out" is what they told us kids.
    - never owned a car. "Too expensive. Why waste the money?"
    - flushed the toilet with water they collected from the bathtub and shower.
    - only heated one room in the winter (living room). The rest of the house was not heated and thus ice cold.
    - bought used clothes for us kids and for themselves in garage sales.
    - were able to buy and pay off a very modest semi-detached 1200 sqft home in a working-class area.
    - were able to send 2 kids to college and grad school while they never went on a single vacation in their entire life.

    This is middle class life. This is how the 60s and 70s were for a single income household and I don't understand why people expect more today.

    I see a new age of frugality coming up for a generation that simply grew up expecting way too much and learning the hard way that money doesn't grow on trees.
    #44     Feb 26, 2009
  5. But yet you trust the government inflation numbers, because they would never ever massage their numbers & misrepresent the truth.

    Real wages peaked in 1970s, I have seen multiple studies on this, not by the government, obviously. Sorry if this pisses you off, but it's the truth. Looking at the price increases in the raw basics of life explains why. I don't think BLS considers food costs in their analyses, it's too "volatile".
    #45     Feb 26, 2009
  6. #46     Feb 26, 2009
  7. I can't speak to teh 70's since I was the oldest and born in 1978. However growing up in the 80's/90's we were a single income family with 3 kids (a fourth if you count my friend who lived with us).

    Dad made good money (right in the middle of being middle class)
    3/1/5/2 1700 sqft house
    Very rarely went out to eat
    2 cars
    we all played sports or piano or dance or something like that
    no cell phones but had cable, VCR, decent TV, etc.
    Ony remember 1 vacation we took as a family, on a few others we went where dad had to go for a business trip.
    Company sponsored health care
    Kids had to pay for college through scholarships, summer jobs, and student loans.
    Unfortunately the parents never saved a dime.

    Fast forward a few years to the questions can someone make it on 30k/yr.

    I first stated at 23 with a family of 4 on a single income of 36k/yr in 2002.
    Bought a 3/1.5/0 1400 sqft house
    rarely ate out
    had cell phones, cable, crappy TV
    Took vacations to visit family
    saved ~5% of income
    had to pay for private health care
    we had 2 cars that we used and base model
    Unfortunately the neighborhood was less than desirable (but not quite the hood) and the schools were crap but it was the best we could do.

    It can be done and a person can make progress but you will live a frugal lifestyle. The lifestyles you see on TV will not be available to you and the majority of the crap that is advertised will be unattainable.

    Fast forward to now and things are different. I got more education and busted my ass in my career field to put myself in a better position to provide for my family. On a single income we clear over 100k/yr now. I made my self valuable so that I am one the top paid persons in my industry given my age.
    We live in a nice neighborhood
    Our kids go to good public school
    We still drive used cars that are almost base model (the wife gets the nice American made SUV and I get the econo box)
    We eat out more
    House is a 5/3.5/2 3400 sqft
    We take vacation once or twice a year but nothing extravagant.
    We upgraded out TV
    Company sponsored health care is better than most
    Our only debt is house, car, and student loans.
    and we put aside ~12% of income for retirement.

    What the point in all of this:
    1) My parents lived a different lifestyle than my family does
    2) you can make it on 35 k/yr - 40k/yr but don't expect the niceties in life
    3) you are not stuck where you are. All it takes is educating yourself, working your ass off, not getting complacent, learning how to make opportunities for yourself, and making yourself valuable in a field that has potential for better than average earnings. Some careers just won't get you there no matter how educated or hardworking you are.
    #47     Feb 26, 2009
  8. volente_00


    Well I'll start by saying your taxes are not right, 30k x 7.65% is 2295 for ss, of that 30k, using just standard deduction you would subtract 10,900 for husband and wife, with 2 kids and the adults that would give 4 exemptions @ 3500 each their taxable income would then only be $5100 taxable income at 10% so 510 there. They may also qualify for earned income credit but I won't go into that. So they make 30k, all tax liability max will be 2805 which leaves 27195 / 12 or $2266 a month for living.

    Rent's going to vary widely but given the 30k income let's just say it's in the south. A 2 bedroom townhome around here goes for $600, The one I lived at a long time ago, I was 800 sq ft and my utilites averaged $80 a month, the landlord paid water, sewer and trash. You can bundle cable phone and internet for $100. Gas about 100 a month assuming 1 car getting 20 mpg, car insurance 80, a car note ? Sorry car's gotta be paid for to make this work. A 1995 toyota camry that cost 3000 will do the job. Food seems a little low at 600 for 4 but maybe they are eating ramen noodles. Your insurance is cheap though, I know a family a four where one works for the state and just the health insurance is $500 a month. And this leaves you 206 left a month for misc but no savings for college or retirement.

    This thread is interesting as I was talking to an older guy a while and he said when he got married in 1968, he worked driving a lance delivery route and his wife stayed home, He said his house note was $65 a month and he had a car note, don't remember the payment but he said after paying all the bills every month he still had money left over to save back then.

    Times were quite different back then as well, drive into an older neighborhood sometime. Most of the houses are under 1000 sq ft in the older parts in my town but now days people think they have to have a big house and 2 new cars just to keep up with the jones's

    I actually did some research once about a neighborhood and the houses were built in the 50's. In the early 1950's the houses sold for 4 to 6 k, in the late 70's my relatives lived on the same street and they said they paid around 20k and today those same houses sell for 100-120k. And that's your inflation lesson for the day.

    #48     Feb 26, 2009
  9. volente_00


    Yes you raised your income but also raised your obligations as well.

    In the end, are you really any more happier than in the first scenario ?
    #49     Feb 26, 2009
  10. Asterix


    You were lucky. We lived for three months in a paper bag in a septic tank. We used to have to get up at six in the morning, clean the paper bag, eat a crust of stale bread, go to work down t' mill, fourteen hours a day, week-in week-out, for sixpence a week, and when we got home our Dad would thrash us to sleep wi' his belt.


    #50     Feb 26, 2009