Updated on 01.30.09

The Bills Your Parents Didn’t Have

Trent Hamm

Gravel Road by DannyBen on Flickr!When I was young, my parents always managed to make ends meet, even though my mother was a stay-at-home mom (she had a less-than-ten hours a week part time job when I was in school, but nothing else) and my father worked in a factory. Sure, we were able to bring in a little extra money by fishing and we lived very frugally at times, but my parents were able to raise three children on the income of one factory worker.

Flash forward to today. That scenario is basically impossible. Virtually every family I know either has both parents working full time or one of the partners earning a very solid income. The idea that one parent can work a typical factory job while the other parent stays at home is pretty much a thing of the past.

There are a lot of reasons for this change. Many people will point to inflation, talking about how much housing prices have gone up since the 1970s without a similar increase in wages. Others will point to food prices.

For me, though, the biggest change is the sheer number of bills that a “normal” family has.

My parents, for example, had their mortgage payment, a payment on a used car (usually), insurance, electricity, and phone service. That was pretty much the extent of their monthly bills. They had their own well to provide water. They had a septic tank in the back yard. We had an antenna on our roof to watch television. We burnt our trash in a barrel.

Compare this to our situation. We have all of the above bills (minus a car payment, at least for the moment), but we also have a cable bill, an internet bill, a cell phone bill, a water bill, a garbage bill. Other families in a similar situation as ours have many more bills: a car payment, Netflix, a satellite bill, and so on.

This adds up to hundreds of dollars a month for services that my parents simply didn’t have or need.

What can be done about this? The first thing to look at is whether or not these bills are actually required, or if they just seem to be. Do we need internet access? I use it for writing The Simple Dollar, but we could survive without it by using the library (which is within walking distance). Do we need cable? Not really – we could just toss up an antenna, use a converter box, and still enjoy Lost. Do we need a cell phone? It’s nice to have during emergencies, but we could get a prepaid phone to take care of that need.

Right there, we’re saving more than a hundred dollars a month. If we lived in a more rural situation, we could utilize a well and a septic tank and eliminate our water bill, too.

What does this little exercise teach us? My parents were able to make different life choices because they weren’t constrained by modern expenses. Even more important, we don’t actually need many of these expenses – we choose to have them.

If you ever feel stuck in your financial situation or your life situation, take some time and look at your bills. Ask yourself how many of them you actually need – and how many of them your parents would have tolerated. You might find that many of those bills can easily be tossed without reducing your quality of life much – and when you do that, you free up a lot of after-tax money each month. That money can make the difference between having the stuff that you want – or living the life that your soul needs.

Good luck.

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  1. Chrissy says:

    We just canceled our cell phones about two weeks ago, savings of $62.29 per month. We are still getting used to life without them (my husband actually misses it more than me) but there is a certain freedom that comes with not having it. Yesterday while we were out enjoying time with our kids and running errands no one could call and “interrupt” us, not having to remember to bring it with, charge it up or turn it to silent.

  2. Brigid says:

    Trent, your parents may have had fewer bills, but most of the things you mention bring in significant benefits. Like you, I make money from my online writing, so the internet is a net gain for me. Yes, I *could* walk to the library and use the computers there, but I do a lot of my writing in the off hours, such as first thing in the morning. If I cut out home internet access, I wouldn’t be able to write as much and I would actually lose money.

    Also, with two teenagers, I can tell you that cell phones are worth every penny. I have trained my daughters to text me frequently when they are out and about, and I can call them if I haven’t heard from them in a while. The peace of mind that provides is priceless.

    Bloggers who insist that everyone should cancel their cable or they’re not really being frugal drive me crazy. I live in an area with terrible reception; if it weren’t for cable, we wouldn’t have any TV at all.

    Finally, septic tanks aren’t free—they need regular maintenance—and my city, like many others, charges a trash fee automatically—it’s not optional.

  3. nickel says:

    If you’re really reserving the cell phone for tru emergencies, then I don’t think you even need service. I believe that they’re required to transmit 911 whether or not you have service. Or at least it used to be this way.

  4. There has been increasingly intense marketing by corporations for decades. With new companies entering the marketplace they have competed very strenuously with each other and very persuasively with consumers in many unique ways. It’s difficult to avoid this massive expanding persuasion that insists we need more. Individually we can resist if we have the will but as a society it will be difficult to change course.

  5. Great post Trent.

    I call some of these things, “The New Necessities of Modern Life”, here are a few from my list:

    – Hair dryers as opposed to an old fashioned bath towel
    – Answering machines (now voicemail) as opposed to calling back
    – Texting as opposed to an old fashioned phone call
    – Nine year olds with cell phones as opposed to a dime, I mean quarter, I mean fifty cents
    -Cell phones as opposed to a home phone (we recently dumped the home phone for the cell phone and when I was single, I used the cell phone only– they aren’t getting me with a monthly bill twice!)
    – Bottled water as opposed to good old tap water (filter it if you must)

    The rest of my list is here:

  6. Great point! It’s the little things that are budget killers. I grew up with basically the same scenario as you. Sometimes I wonder if we’ve slowly but surely become used to some of these luxuries and now view them as necessities. Not really much thought going into it as time goes by.

    I also view many of these expenses the same as the way we’ve changed food buying habits. A whole chicken in the meat department would’ve been a convenience as late as the early 1900’s. Now we have it seasoned, diced and cooked ready to add to a meal. Some have now started to view this as a need also, making the grocery expenses way more than what is actually.

    It’s like the experiment with the frog that is placed in warm water. Turning the heat up 1 degree at a time and the frog not realizing what has happened until it’s boiled to death. We do the same thing in many ways.

  7. DrFunZ says:

    I also bet your parents, like mine, never purchased “Lunchables”, or “sippy boxes of juice”, stretchy book covers for textbooks. We used a lunch box and paperbags to cover books. But if it exists, there is a desire to have it, even though we do not need it. As a child, in the late 50’s, I went to McDonald’s about once a month for a treat. We had all our extended family gatherings at someone’s home even though no one’s home was bigger than a simple flat (apartment). Dragging folding tables and chairs to each other’s home was normal. Yes, we splurged for the fancy birthday or anniversary cake from a real bakery. But now, three-year-olds have special parties with their friends at restaurants or movie theaters. And the extended family gathering ends up at a restaurant for Sunday Brunch.

    Mostly we in the middle class have changed our spending habits for convenience, less clean-up, set-up, cooking, planning, to save time. But, from what I can see, we are using the time to work so we can afford the conveniences.

    I suspect that this economic down-turn is going to eliminate alot of “I want” spending in order to maximize “I need” dollars.

  8. leslie says:

    I wouldn’t count the cell phone bill. I have one instead of a landline (as do a lot of people), so that bill breaks even.

    My parents definitely had a cable bill.

    Also, the water/garbage expenses depend on whether you live in a rural or residential area.

    I will agree with you that no one needs cable nowadays if you have the internet. Sure you can put up an antenna but, better yet, just use hulu and all the other free streaming television show websites out there. The best part? No huge commercial segments.

  9. Lenetta says:

    Further, the extra bills my family has also seem to be a drain on my *time*. I feel like I can’t get it all done, but it’s because I’m surfing the net, watching the food network or a Netflix movie, etc. Maybe if hubs and I cut our online time, we’d play cards more, or read more, or I’d spend more time cooking from scratch with my little one. I read somewhere that all we have is time, and we trade it for things. Wait, was that from you, Trent?

  10. Julie says:

    @Nickel: Even in an emergency, 911 might not be your first choice. If my car broke down on the highway, I’d call CAA (the Canadian equivalent of AAA). Calling 911 wouldn’t do me much good. If I were expected somewhere, I’d also want to call my host to let them know I was all right. This isn’t a “worthy of 911” emergency, but I think it would definitely be handy to have some pre-paid minutes.

    @Trent: I once read (and it might have been here; I don’t remember) that there are still people living a 1950s standard of living, only today they’re called “poor.” Like you say, it’s a matter of what we think is important and what we take for granted. Neither my boyfriend or I really watch TV, but I consider an internet connection something important to me. I could give up a car without too much difficulty (Montreal has a great public transit system), but I’d want to keep my cell phone.

    It’s all a matter of priorities, I think.

  11. Verbose says:

    Burn the trash! Ha!

    Well, obviously I’ve never lived in a rural area, I’ve never heard of that and am pretty sure it’s illegal most places. Our previous home (suburban) had a monstrous back yard and we had way more yard waste (branches and such) than we could handle. I asked our city government, and the answer was clear. No burning it, no way.

    That was another bill we had: yard waste disposal, cost about an extra $20/month, and with that massive yard there was no way to go without it. Eventually, we moved. The yard was just too much.

    In our area, you use the trash hauler the city chooses for you and pay what they say you have to pay. Period.

  12. Brigid says:

    You’re right, Julie. We pay for cable, internet, and cell phones, for the reasons I gave above, but we only own one car. That’s a conscious choice, and the savings probably cover all that other stuff.

  13. Rick says:

    You make a great point about extra bills. Two years ago I dumped the cable as did two of my co-workers. We never missed it. While we can’t burn trash in the city I did cut down to one garbage can for a savings of $13/month. I got rid of the cell phone and also switched to Voip. All my debts were paid and I saved a substantial sum so I canceled my life insurance. I canceled all newspapers and magazines and now ride in a car pool. I have an Internet connection but because my wife works from home one day a week her company pays for it.

    Things you don’t need — get rid of. Your time — priceless.

  14. Camille says:

    Brigid and Julie are right. Part of the issue is just that “in the old days” we had a lower standard of living.

    But I think Trent was only saying that the “standard” doesn’t have to be one size fits all. Because these bills are so standard, it can sometimes be hard to notice the ones you don’t really need. So it never hurts to take a different look at where you’re spending money.

    Here are two ironic things about Cable for me. I need to keep tabs on TV for professional reasons, but I don’t have cable, because the internet and DVDs are actually better for those with a focussed interest. (Cable is so full of junk.) The second irony is, now that I don’t have cable, I watch more TV than before, because I don’t have to miss anything. It’s on at my convenience.

    So as a result, TV has become MORE of a time sink for me. Sigh.

  15. Sorry, but a couple hundred dollars in bills is not the difference.

    The real difference is the cost of healthcare and the non-existant pension.

  16. Ed says:

    I gave up cable last month. The only show I must see is LOST. In a situation like this, another alternative is to watch your must-see shows at a friend’s house, watch the episode the next day online, or buy a season pass from iTunes. The price of a season pass is about the same as one month of cable service.

  17. Jaspenelle says:

    My husband makes around $13/hr and I am a stay at home mother. It takes a lot of hard work and strict budgets to make it work, but even in that light we are able to live debt free and put a little towards saving each month while still having Netflix, dsl etc. We use prepaid cell phones ($20 bucks recharge ever 3 months) since we hardly use them and don’t have cable, beyond the local news we don’t watch tv anyways. I have always made meals at home, even when I had a job. We saved up for our car and bought it with cash so no payment there. If there is a problem with it, there is always the bus.

    Maybe that is why I am always surprised when I meet other families with similar living situations and where the mother wants to stay home but still works an extra job. Generally almost all her paycheck goes to childcare anyways.

  18. Carmen says:

    I agree with comment number 9 that it isn’t these new bills that have necessarily made the big difference between the generations. I think one major factor is the cost of housing. House prices inflation has increased much more than salaries, thus taking a higher percentage of take home earnings. And secondly, expectations have increased hugely, beyond cable TV and mobile phones. I was born in the early 70’s and as a young child had three outfits (dresses); one on, one in the laundry and one drying/available if needed. And one pair of shoes until I needed trainers. How many children these days have so few possessions? I can recall 1 or 2 books, a bike, doll, pram and one soft toy.

    Trent, as a part time working mother of two children, I think you have also under-estimated your mother’s financial contribution to the household when you were a child. I rather suspect that her income, however small, was truly needed in addition to your dad’s factory worker wage.

    There are also plenty of families with sole income earners of a roughly average wage, just like your parents, at all levels of the income spectrum.

  19. You’re so right that a lot of the bills aren’t necessary. They’re paying for luxuries and/or conveniences that many people feel they “can’t live without.”

    Cell phone = necessity for us. We don’t have a landline. And since most of our calls our out-of-state, we probably save money by using a cell vs. landline too.

    Texting package = not necessary, but fun. We could save $30/month by cutting it out. Considering this.

    Garbage = not a necessity. In most cases you can haul your garbage to the dump yourself. Most people don’t want to do this, so they pay $7/month or however much it is in your area.

    Cable = not a necessity. We watch a lot of shows on the network websites, and also have antenna/converter box (which gives us about 2-3 channels).

    Netflix, = not a necessity either. We pay $17/month for that entertainment. We don’t go out to see movies so that saves us money. We stay in and watch DVDs at home. Even better because you can pause it to get a drink or go to the bathroom or rewind a part you didn’t hear the first time.

    Internet = not a necessity. Before we got it hooked up here, we went to the library or the CBQ to use their wireless networks. It was a pain. We pay for the convenience.

  20. Kenny Johnson says:

    Good points. We actually cut cable for about 6 months about the time gas prices were $4.50/gallon. We had Netflix and the Roku box. So it cost us $10/mo. We recently moved and Verizon offered us a packaged deal (Phone, TV, internet) for $99. Doing the math, it meant I could add FIOS TV for about $33/mo. And the discount would last a year. So we’re now a ‘cable’ family again.

    My wife and I haven’t been regular cell phone users for many years. We both carry pre-paids and rarely use them.

    But… While I do have some expenses my parents did’t, they had some I don’t. I rent, so I don’t pay for water or trash (at least as separate bills). I pay a flat rate for electric & gas (sorta included in rent). I don’t have home insurance. I don’t pay for any home maint. My phone bill is most likely less than theirs (or at least offers cheaper LD services).

    We didn’t have cable until I was about 12, but before that we rented a lot of movies each week from the video store (early 80s).

    In the late 80s (also around 12), we had a computer and subscribed to an online service (pre-internet).

    Also.. While my dad was the sole bread winner. He worked REALLY hard. He worked 7 days a week sometimes — and often put in as much a 65 hours a week.

    I have the luxury of being home with my family more.

  21. Wendy says:

    Brigid: You don’t need constant internet to write- you only need the internet to transmit what you write. That said, I’d cut many other expenses before giving up my internet.

  22. Avdi says:

    Nice post. Good for you for pointing out that *where* you live is also a choice – I see a lot of people complaining about the “unavoidable” costs associated with living, when really they are paying the taxes, fees, etc. associated with their choice to live in a metropolitan area. Our family goal is to eventually move out to a rural farm. It won’t be as convenient to shopping and entertainment, but it will enable us to opt out of a lot of expenses.

  23. Mable says:

    I agree with comment number 9 as well. I once watched a presentation Elizabeth Warren gave (I believe on YouTube) comparing a 1970s family with one working parent and a current family with two working parents. I believe the main cost increases were housing, health care, and the necessary childcare. The price increases were absolutely huge. Money spent on luxuries such as clothing and other consumer items including cars and high tech stuff actually went DOWN. This was due to globalization, mass production, etc. lowering prices- however, these price decreases were a drop in the bucket in comparison to the huge price increases in housing, health care, and the necessary childcare. That kinda sums things up if you ask me. I believe she did large amounts of metaanalysis to come up with her numbers.

  24. Brigid says:

    @Wendy: It depends on the type of writing. I do a lot of blogging, so I really need to have the internet on as I write, both to find links and to input the material. It’s handy the rest of the time as well, because I can quickly check a fact or the spelling of a name.

    I agree with the bloggers above who point to other factors as being more important. This may be a regional issue, but the cost of housing here in the Northeast is phenomenal; even 12 years ago, when we bought our house, we were almost priced out of the market. My father was a college professor, just starting out, and my mother wasn’t working when they bought their house, and it was affordable for them. My husband is a college professor as well, but the mortgage was a much bigger stretch for us.

  25. almost there says:

    I agree with comment #s 9 and 15. Most workers have been shifted from DB to DC plans for retitement. I just finished my taxes and 48% of entire household income went to State, federal taxes and 401K and Roth Ira contributions. Food in the USA is the cheapest (inexpensive) and most abundant in the world. Hence the multi-billion dollar weight loss business, and added cost to healthcare for weight related problems.

  26. Abby says:

    Great article. Here’s another one that I was recently discussing with a neighbor: growing up, we never lived more than a few hours’ drive from our extended families. Today, many of us live on the other side of the country from our parents – meaning that taking the kids to see Grandma is pricey – airline ticket pricey!

    In the rare case that someone was living far away – in the military, etc. – there was no expectation that you’d travel to see them. You just sent lots of pictures and called when you could.

    Somehow we’re all expected to hop on airplanes for every occasion these days – adding thousands of dollars to our annual budgets.

  27. *A* says:

    My converter box and bunny ears don’t pick up the channel that has LOST, so instead of getting cable, I just watch it the next day on Hulu. TV is one thing I will not pay for!

  28. Heather says:

    I wholeheartedly agree that internet is not necessary. However, we have always had it and it has turned out to be worth it’s bandwidth in gold! We have virtually no other entertainment expenditures. We don’t have cable or a converter box or any way of picking up signal on our TV, so I just watch TV online! You have to wait until the next morning to watch Lost, but ABC puts it on their website and I hope they never stop.

    It’s also an invaluable tool because I like to “coupon” (that’s my other entertainment, hehe) and I save so much time and money by letting bloggers tell me about the deals instead of hunting them down myself.

    Anyway, good post. We’re switching to prepaid as soon as our contract is up next month. We talk on the phone so little (even with cell phones being our ONLY telephone) that for the cost of two months of traditional cell service we can have enough minutes for an entire year.

  29. Rob in Madrid says:

    One other huge change which is rarely mentioned is a second car. Growing up I don’t I knew anyone who had 2 cars, today even amongst one income families two cars are a must.

    Secondly item as Mable mentions is college. A generation ago very few people went to college today you need a 100 grand per child to send all to school, add in the fact pensions are history and you need more money than one can possibly save-

  30. Stacey says:

    We have a well and septic. While I’ll agree with you that there is monthly bill for these services, they do require electricity to function. Well, at least the well pump does. :-)

    Yes, it’s less expensive to pump your own water. But it’s not free.

  31. Sarah says:

    If you take out roughly the top ten percent, salaries remained *flat* through this last decade of prosperity. And that was calculated before the most recent recession. This while our productivity increased and the number of hours worked by the average American went up, too. Where did that money go? Into the pockets of that top ten percent.

    It amazes me that more people aren’t up in arms about this. It didn’t happen by accident.

  32. ChrisB says:

    “but my parents were able to raise three children on the income of one factory worker.
    Flash forward to today. That scenario is basically impossible.”

    Just a tidbit to offset your assertion…my sister and brother-in-law raise 8 children on the income of one factory worker(union)(about 45k). So it is possible! They are not “poor”. At times things are tight, but they manage. They pay nothing in childcare since my sister stays at home with the kids, they pay very little into health(insurance, copays, etc) since he is union and they live in a low cost of living area. They own their house outright, which they built. They send their children to Catholic grad school. So it is possible, but they live within their means.

  33. Grace says:

    A couple of other very big differences–I’m guessing your factory-worker father retired on a pension from that job, and it may have included medical. My father was a longshoreman. When he retired, he got both. Also your parents wouldn’t have had access to the credit cards and lines of credit that we take for granted today. When my parents helped me fund college, they went in and sat down with the bank president, who was a member of their church. He went through their budget and their finances very carefully before loaning them $1200 which my parents paid off faithfully each month over the course of a year before going in and starting the process all over again. It’s a very different world out there now.

  34. You seem seem to have left out some big new expenses such as frequent eating out, and daycare.

  35. Bill in NC says:

    Housing & transportation are usually the largest household expenditures.

    Most of us would rather live in a 4000 sq.ft. home than the 1500 sqft. homes of our parents.

    And have one vehicle per driver instead of one per household.

    Internet, cellphone, and cable subscriptions pale next to mortgage and auto loan payments.

    Choose to live in a smaller residence, drive used vehicles (if you drive at all), and you will save much more than cutting out Netflix.

  36. IRG says:

    What’s necessary differs by family, work/lifestyles and location.

    I didn’t have a cell phone for years. Then I had to travel for business and it became a necessity.

    No Internet? Impossible for anyone in business today, since one receives email, transferred files, etc. (You don’t have to be a blogger to be online to need the Net.) And it would take longer and cost more to find a library or free service to tap into. (And no, I can’t share net service with someone else. Although apparently it is done a lot.)

    No cable? Wish that was an option but I’ve tried antennaes and converter boxes. Here in a big city, does not work. (And also tried haggeling with Time Warner for discounts. Forget about it.)

    Smaller residence? I’m already in the smallest one I can afford. I could not afford to move.

    Meanwhile, my income has been flat for years while everything continues to rise (Con Ed–I use much, much less now thanks to energy saving appliances and shutting stuff off, but STILL pay much, much more due to seemingly constant increases). Transportation: Out of my hands, the MTA keeps raising.

    Everyone cannot live in the country with no cable or net and make a living or in an affordable house.

    I agree with other commentators: costs of healthcare, food, housing all are high in proportion to any increases in salary/income.

    And we’re talking about people who already live in small residences, have one or no car.

    (FYI: What I said about me, applies to lots of people here in NYC. Contrary to the image of us all having big-time jobs and lots of money before the “fall”, that is not the case.)

    You simply cannot keep up (let alone get ahead) as there are not the opportunities (for the average person) to make money today.

    Just ask the PhD cab drivers in this city. And the un- and underemployed who apply for any/all jobs but aren’t hired because they’re too old (over 40!) or “overqualified.”

    Everybody isn’t having trouble because they overspend. Or make bad choices. It gets really old reading this all the time.

    FYI: It would actually cost me more to move out of the city (I’ve thought about it) and live. Unless I had several roommates, which is not an option for someone at my age…nor one I’d voluntarily choose.

  37. Shevy says:

    One point about hulu. It only streams video to IP addresses it recognizes as coming from the US, so it’s not useful for Canadians.

    And cars are really a huge expense. Add up a car payment, plus insurance, plus gas, plus routine maintenance and you could easily be looking at close to $1,000 per month!

    When I first got married in the late 70’s my hubby earned about $800 per month! Lucky gas was .28 per litre back then and that we owned an old beater.

    Seriously, if we moved to our rural home today the 3 of us could probably live on $24,000 per year with our one (paid for) car. But there’s no way we could afford to add a 2nd one. If that makes it appear that cars cost more than kids, well, that’s food for thought isn’t it? Wasn’t Trent just talking about stuff that doesn’t love you back?

  38. Laura says:

    Hi! This is my first comment on your blog. I am a newer reader and am enjoying your posts. I am a stay at home mom to six young children and we survive and thrive on my husband’s income which is not very much…he is a retail store manager. I enjoy learning everything I can about frugality and simple living….we don’t have cable or a cell phone payment each month. We have only the most basic phone service which does not include long distance. We use pre paid phone cards. I bake and cook almost completely from scratch which saves us tons of money and we are firm believers in NOT WASTING anything! I just repaired two pairs of pants that belong to my son. Anyway….just wanted to share my two cents.
    Thanks for a great website,

  39. Jennifer says:

    It can be done. I stay at home with my 4 kids and my husband is a teacher. It just requires a lot of sacrifices that most people aren’t willing to make.

  40. Empress Juju says:

    I currently live without a TV, a home phone, and internet at home. Every time I get a recurring bill, I check to see if it’s a necessity or if it can be cut altogether or lowered.

    It’s good. I’m happy. Instead of spending money on recurring entertainment expenses that I take for granted, I take fun classes and socialize with real people who make me feel good about myself, instead of watching fictional characters that I’ll never live up to.

  41. cv says:

    @Kenny Johnson, Comment #13 –

    You may not have to pay for home insurance, but I hope you have renter’s insurance. If your building burns down or you get robbed, generally your landlord’s insurance won’t cover any of your possessions. Think about how much it would cost to replace everything you own – clothes, the food in your cabinets, pots and pans, furniture, electronics, books, jewelry, etc. I pay around $200/year – I started my policy the day after I sat on the front steps of my building watching firemen douse the flames in an apartment across the street.

  42. Dubby says:

    As a stay-at-home mother of four married to a teacher, I think there is a LOT more waste in a normal budget today than in your parents’ time. Yup, we shopped GoodWill, cooked food from scratch, didn’t go “out” to movies, skipped soft drinks, and got the $19.99 satellite (which we seldom watch). A cellphone for a new driver is good, but not kids under 16. Holidays were kept reasonable, certainly under fifty dollars a child. If the kids wanted expensive things, they had to work for them.

    When I got married in ’81, we paid 21 1/2 percent interest on our house and unemployment was extremely high. On a relative basis, technology of any kind was extremely expensive. I had a $100 phone bill to my fiance just 30 miles away. Starter homes were 1000 square feet, not the mansions many college grads insist on today.

    The hardest finances for me was the public schools with their hands out all the time. $400 just to register them for school! $300 for an advanced class. And then graduation costs…

    Now they are 19-25, worked or are working their own ways through school, and understand the value of money. They are happy and have thanked me for teaching them frugal techniques.

    They are appalled at friends who complain of poverty but go out to eat often, buy $50 jeans, and drop $2000 on a new computer. We have lost sense of priorities and the need to save.

    My mother’s admonition “Any problem that you can throw money at to solve, isn’t a problem at all” would be a great lesson, as is the corollary, “Always live your lives so you have enough to throw at life’s problems as they come.”

  43. jb says:

    I’m not sure *all* of these are unnecessary, although some clearly are:

    I think Trent would agree that the water bill is a necessity — at least in relative terms. (Although watering the lawn may make it unnecessarily high.)

    On the other extreme, a cable bill is *clearly* a luxury. Especially considering what you can watch for free on the Internet these days. If I lived alone I would probably give up cable.

    Cell phones: Situations will vary, but most households probably have cell phone plans that go far beyond the “necessity” level.

    Garbage pickup: We got my mother garbage pickup as a Christmas present this year. She had to bring her trash to the dump, which she *hated*. This was clearly a luxury; she has been taking her trash to the dump for years. But at the same time, the difference over what it cost her in “dump tickets” and gas wasn’t really that much. (Of course, dump tickets is a relatively new expense; when I was a kid taking trash to the dump was free — except for time and gas.)

    Internet: My finances would have to be really, really, really tight before I gave up high-speed Internet access. I’d live without a phone before I lived without Internet access. (That said, Internet access helps to make life without a phone more feasible.)

    Of course, I’m pretty sure Trent’s point wasn’t that these are new bills, but that many of us pay for luxuries that we forget about.

  44. Danielle says:

    My husband and I have made ends meet in SoCal on one salary that isn’t substantial (44-66k). We have had two kids during that time(the last 4 years) and I have stayed at home with them the whole time. We have no debt except for our used van that we bought when the second was born and our previous vehicle became more expensive to maintain than it was worth. We weren’t putting a lot into savings but we were putting some into a matched 401k and some into emergency savings. We can’t afford a house but we are renting a small three bedroom house(in a nice, safe, family community). We have cut out cable and the home phone- not a huge amount of extra income there but every little bit helps. Basically people can live on one salary anywhere. We live very comfortably too. And luckily now my husband is starting to make more money so we hope to be able to buy a house in a year. We are putting all of the new income into savings :)

  45. Sharon says:

    Re canceling life insurance. That is a very risky thing to do. If your spouse is seriously injured in the car crash that kills you, s/he is up the creek without a paddle as earning what they did before the crash may never be possible again, and expenses will be much higher. And you will never the the younger age you were if you decide for some reason that you do need it after all, so it will be much more expensive to get more later. Planning for the best-case scenario is an extremely expensive gamble.

    And amen on the renter’s insurance! Unless you can self-insure for long term disability and all your possessions, it is a false savings.

  46. Sandy says:

    If the stories my parents told me about their parents are clear in my mind, neither of my sets of grandparents owned a house until they were into their 40s. The only reason my dad’s parents got a house was because he got his parents to give him money for a down payment (after his siblings found out, they didn’t talk to him for over 20 years!). On my mom’s side, I remember her saying that they rented all of their homes, and in the last years of my grandfather’s life, they bought a tiny house in Florida.
    I wonder if we are going to be heading back to renting rather than buying in our future, like it was for my people 50+ years ago.

  47. Soell says:

    This is interesting. I’m from the United States but I live in Mexico. We have one car and a small motercycle. My husband and I both work, I as an English teacher at about 6.50 (in dollars) an hour, about 15 to 20 hours a week, he at whatever he can find working for himself because the wages at any job he could get are terrible. We don’t have cable but we do have Internet, even though I can use it at work. I use the Internet to send letters whenever possible, to keep in touch instead of the telephone, and as a library. I read everything I can get my hands on that’s on the web, I use the Internet to get ideas for classes, to help the kids with their homework, to do research, and more. It isn’t a necessity but I would hate to be without it. We have cell phones but we don’t really need them, and phone which is more for my husband’s use than for anyone else. I have to say that I would give up everything else that I could before I would give up the Internet because it is the most all around useful thing that we have that our parents didn’t have. It is also the most necessary I think for someone living out of the country that wants to stay in touch.

  48. Michelle says:

    I’m a licensed vocational nurse working full time and my husband delivers pizza part-time to be a stay-at-home dad during the day. We do very well making close to $50,000/year. We do have cell phones and cable and the internet. We are also able to save 11% of my income in a 401K and an additional $700/month or so for vacations, repairs, gifts, etc. I think what makes a difference for us is that we have no car payment (we buy used cars in cash) and our mortgage payment is fairly low– around $730/month. I do believe that many people struggle, not necessarily because of the “little expenses’ like cable, cell phones and internet, but more so because of the high cost of housing, car payments and health care.Those few things can really be the biggest drain on a family’s finances.

  49. Rick says:

    Some very good comments here. Consider where I work: for over twenty years many of us have worked in the same group, approximately on the same salary, same access to health care, and similar expenses. Over the twenty years a few would be out of debt early on, some just recently (like me), some have a way to go, and one has lost their home. The difference seems to be that the ones still in debt buy every new toy and have made poor financial decisions. The ones out of debt are the ones saving one to three hundred dollars by cutting back. It does make a difference if you cut back. The dollars add up. Granted, every commenter here has a different situation. But where the situations were similar, like at my work, some people simply made poor choices.

  50. Mark B. says:

    Comment #9 said it right.

    A hundred dollars a month is not the difference between making it on a factory workers salary and having two working parents.

    I would guess that your father was guaranteed a pension and health care for life, correct? The same pension and health care that is currently under assault in America. They say factory workers that are guaranteed health care and pensions should have them cut out!! Maybe the answer is just the opposite, maybe we should be working to give these benefits to more people.

  51. Kira =] says:

    It is possible to raise a family on only one income. My husband only makes $38K a year and we have 3 children, 2 cars, & 1 mortgage. Even still, my Mom & Step-Dad raised 9 children on one income. He was a 3rd shift RN that only made $39K. And to make it worse the other parents weren’t paying any child support for the first couple of years either. They had 5 teenagers in high school at the same time, and those 5 were very active in extracurricular activities. You have to be frugal to be a single income family, but it is possible. You have to give up some luxuries that cost, but what you get back from being at home with your children is priceless.

  52. Anitra Smith says:

    We are figuring out how to make it on one good income (software programmer) with a tiny bit of supplementing income from second job and hobby business(maybe $100/month at this point). We still are having a little trouble making ends meet (only been doing this for a few months since our baby was born), and internet access is a must, not only for my own hobby business, but also because my husband spends time “on call” and must be able to do work from home. No, his job will not pay for the internet, but he is required to have it anyway.

    If we continue to fall short, we have considered dropping to one car, but that would probably drive me stir-crazy from being stuck at home with no adult interaction, or conversely, I’d never get to see my husband, since he’d have to spend 4+ hours/day using public transportation.

    When I think about it, my parents had all the bills we have, except 3: cellphone bill (but we don’t have a landline), cable/internet bill (we did have dial-up internet), and Netflix ($8/month). The difference is that my parents were at a different place in their lives, where suburban expenses like trash pick-up, second car, etc. did not hit them as hard as they are hitting us. In fact, they enjoyed luxuries like eating out and going out to movies/plays FAR more often than we do – even when they had a baby (like we do now).

    It probably also helps that they each had master’s degrees and no student loan debt at all, where we owe almost the equivalent of a year’s salary for our bachelor’s degrees.

  53. George says:

    Expenses they had then and we don’t: magazine/newspaper subscriptions, camera film & developing.

    Expenses we have now and they didn’t: broadband Internet, liability insurance for driving, 2nd car, higher cost of housing, cordless tools, camcorder, digital camera, more prescriptions and more convenience food.

    We could have a cellphone or cable/satellite, but choose not to.

    Things that are similar: electricity, water, garbage, clothes, furniture, gardening, and a government job pension (the last place you can reliably get one!).

  54. LC says:

    The bad thing about a single income is that if that one person loses the job, it is a major disaster. There is no understating that. It is a risk not worth taking. The odds of both losing a job at the same time are much greater.

  55. Jade says:

    As for everyone mentioning garbage service, I wish we didn’t have to have it in my area. We’d really rather just haul it to the dump ourselves, probably cheaper and much more reliable. Unfortunately our city has an agreement with a garbage company that requires everyone to pay for garbage pickup, even if we don’t need it. And then they don’t pick up our garbage and charge us for it anyway, and when you call to complain they tell you “Oh we’re not required to pick up the garbage *every* week” Okay, not *every* week, they’re allowed to miss one week every two years, not every two months!

    Sorry about the rant… that’s $30 a month we could be investing rather than paying for non-existent garbage “service”, and it drives me nuts!

    As for cable TV, funny thing is we actually save $10/month on our internet bill by having basic cable bundled with internet. And we don’t even have a TV to watch the cable on!

    As for Netflix, it’s a rip off for people like me who don’t watch movies very often and who only watch movies that are worth seeing more than once, in which case I buy the movie on DVD. And I just bought 4 DVD’s today at the used record store for what people pay for a month of Netflix. I probably won’t need to hit the record store again for at least another 2 months…

  56. Sam says:

    4 years ago my trash company raised their prices to over $60 for 3 months. I looked at how we filled 3 recycle bins and had on small bagof trash every week. We canceled the trash service. Started weekly trips to the recycling center that (luckily) is 6-7 blocks from our house. OUr trash I was dropping in the trash cans at the park while my son played.
    Now we split with a neighbor -we get to drop our trash in in exchange for shoveling her driveway & taking her cans down. It’s only $20 a month but that’s a couple bags of groceries. All the little things add up.
    I do agree on the mortgages – house have gone up too much. I’ve seen my grandparent’s & my parent’s original paper work from when they bought their homes (both couples never moved, keeping the same house for decades). The home to salary ratio was much better back then.

  57. JE says:

    I disagree with your analysis that two incomes or one substantial income are necessay. We’re a single-income family with three kids. My husband works in theatre, and the arts, my friend, do not pay “very solid incomes”. It’s all about fine-tuning the difference between NEEDS and WANTS.

  58. Lisa says:

    Your garage is bigger than your parent’s house. Go ahead, compare the square footage.

    I know many touched on that already. But look at the new houses being built. Sometimes, all you see in the front is 2-3 garage doors. The kids get their own bathroom. There is a bath on each floor. On top of that, many still have to rent storage space just to store all the stuff.

    When you lived with your parents, u-store-it places did not exist!

  59. DivaJean says:

    I would venture a compliation of some of the ideas mentioned above.

    The average worker no longer has the healthcare and pension that the worker of yesteryear enjoyed. Those higher up the food chain were allowed to keep more of the profits for themselves and “bonuses”- and lo, the word goes out that people should become more responsible for their own retirement monies and healthcare.

    The monthly bills mentioned are drops in the bucket compared to the money not attained for pensions and overall health care.

  60. james says:

    We are addicted to convenience…telling the modern American that we don’t need cell phones or cable television, is like telling a heroin addict that they don’t need a fix. Ever notice a child doesn’t even know there missing something until they get that first cookie…but then they want they cookie above all things? Truth is, we don’t need these things, we could do without, and have for centuries, but your not going to convince anyone that easy…maybe an economic crash is healthy for America right now, bring us back to the essentials…it’s interesting how the rise of convenience and entertainment has correlated with the rise in divorce,crime,broken families…

  61. SteveJ says:


    I liked the point about the dresses. I had 3 or 4 outfits in elementary school myself. Today I’d be dragged off by CPS if my kid wore the same thing to school everyday.

  62. gilora says:

    I don’t think this is a fair comparison. Yes, we have some more luxuries than our parents enjoyed, but in many cases they did not need a college education in order to obtain well-paying secure employment with generous benefits. The cost of a college education has risen dramatically and leaves many with staggering student loan debt.

  63. Carey says:

    In general, our culture’s notion of what qualifies as a necessity has shifted. Indeed, cell phones might be useful in cases of emergencies, for conducting business, and for keeping tabs on teenagers, but they still constitute a want, even a luxury. That fixture of American households–the television (and all its “acessories”: cable, satellites,game consoles,Netflix, etc.)is also a luxury.

    There’s no doubt that the business of living costs something, but just how much is largely a matter of choice. You can have a cell phone, or not. Grow your own food or go to the grocery store, relocate to an area with a lower cost of living or stay where you are. You can buy books or check them out from the library, eatlunch out every day or brown bag it. Take out student loans or not. Finance a new/used car or pay cash.

    I’m thankful I live in a nation that allows me so many choices. But no matter what choices I make, I am responsible for them–whatever the consequences may be, good or bad.

    No doubt the cost of living has risen steadily: our access to housing and health care has become a major expense, but I would argue that our standard of living and our expectations have risen as well. According to the US Census Bureau, the average home in 1975 was 1,660; as of 2007, the average home was 2,251 square feet.

    We eat more foods pumped full of preservatives, hormones, and other additives, and we have seen correspondingly higher rates of cancer and other diseases. I don’t claim that our health is entirely a matter of choice, but we do make many decisions that influence our cost of and need for medical intervention.

    I know these aren’t popular ideas. You might believe, for example, that you couldn’t possibly live without television or a cell phone. You don’t have to. But people have lived full and happy lives for centuries without these things. I live today without them, not because I believe in self-denial or asceticism, but because I choose to do other things with my time and money.

    Again, I’m thankful I have the opportunity to make such choices.

  64. guinness416 says:

    The retirement/pension point is a big one, I think. My parents and their peers also married young, bought houses young, and had ’em paid off young. We start off later these days. Here are some other items that spring to mind:

    Small cars; we fit seemingly the entire street of kids into my mother’s tiny fiat – including a couple of kids sitting in the trunk. I know legally you’re probably not allowed do that now.

    Sharing bedrooms; many of my friends & acquaintances who are parents will uproot themselves and buy a larger home rather than even CONSIDER putting more than one kid in a room.

    Daycare; with younger grandparents and slightly more mothers at home during the day this wasn’t an issue. Also, we were allowed wander the streets and mess around unsupervized in parks etc when we were quite young :) That doesn’t seem to happen today.

  65. Katy says:

    I’m very surprised I didn’t see anyone mention debt service here. In your parent’s time Trent, credit cards were not easy to come by, and could not (by lat) charge more than 12% interest, period. Also, mortgage costs would have been much lower as home prices averaged to twice one person’s salary instead of today, where home prices average more than 10 times an average salary (and in CA, where I am, more than 10 times TWO people’s salaries).

    I like the sentiment behind your post, and it does make sense to look at all these luxury bills and question whether they are worth it, but I think its doing yourself a disservice to not recognize that both the credit and home markets have changed a LOT.

    Personally, I had to take this into consideration in order to gain some empowerment. Before I realized this, I was judging my financial life by my parent’s at my age, and found myself very much wanting. Now I realize that I’m actually doing much better than them, but that not everything is available to me that was available to them.

  66. AnnJo says:

    I think a lot of people are viewing the past through distorting lenses here.

    “Well-paying secure employment with generous benefits?” I’m sorry folks, but that was always the exception, and not the rule.

    Although unionized factory workers did have pension plans, and more of our working population fell into this category than now, those plans were often managed corruptly and sometimes went bankrupt. Assuming they didn’t, they required life-time employment with the same employer, and even then often paid miniscule amounts. Lifespans being shorter, they usually paid those amounts for only two to five years.

    Second, most people didn’t have pensions, like the self-employed or people who worked for small businesses, and the self-employed also didn’t qualify for Social Security either for quite a while, and later had to opt in. I remember my father deciding to opt into Social Security in the 1970s, when he was already in his 60s.

    Third, health care was cheaper for many reasons, none of which have to do with more generous employers and most of which we would not care to return to:

    1. The median age of people was much younger, and younger people are healthier on average; most cancers, especially, take a long time to develop enough to cause symptoms and by the time they did, in our grandparents’ day there was often little to be done about it except die pretty quickly.

    2. Trauma care and infection care are vastly better, so people who would have died within hours of serious accidents or infections now survive to receive weeks, months and possibly years of expensive treatment.

    3. Unlike today, people did not receive treatment for many conditions that were considered untreatable or a normal part of aging, like arthritis and joint deterioration. There was no laser eye surgery, joint replacement surgery, Viagra, liposuction, heart valve replacement, organ transplantation, and very little substance abuse and mental health treatment.

    4. Health screening, with its huge attendant costs, was very limited. (I’ve read that one woman is saved from dying of cervical cancer for every 7,600 pap smears – well worth it, but pretty expensive.) There were no mammograms or colonoscopies. Medical imaging technologies like ultrasound and CT scans were not available to my grandparents until they were in their 80s.

    5. The weak died young. Significantly premature infants did not survive. Children with compromised immune systems did not survive.

    6. Legal, record-keeping and insurance expenses associated with health care have skyrocketed.

    7. The U.S. health care system pretty much drives medical innovation world-wide. We may not all “feel” rich, but by comparison to most of the world, we are, and the rich always pay premium dollar to try out the newest toys. If we didn’t, the rest of the world would never see those toys at all.

    My grandparents (both sets) worked very hard from their mid-teens until their mid-60s – about 50 years – the husbands outside the house, the wives at home. That bought them a 1200 square foot house, no telephone until their 50s, no central heat, eventually one (1) car, clothes homemade or from the Sears catalog, one (1) big vacation trip to a sunny spot, one meal a week at the local diner and a movie once a month. It did not buy them a pension or free health care.

  67. Leigh says:

    This has obviously generated a lot of conversation. The best write and explanation for the differences between our parents lives and ours that I have ever seen can be found in The Two-Income Trap by Elizabeth Warren, Amelia Warren Tyagi 2004. Check it out (from your local library) it is very readable. Comment 15, this is where the statistics are coming from.

    I think Comments 25 and 52 are great also.

  68. beth says:

    I find some of the posts regarding how our parents and grandparents fared don’t seem to fit with what I remember. My family lived in Midwestern small towns, so the cost of living was much, much less. But both my parents and my grandparents lived in 1600-2000 sq foot, 100-150 year old houses, some with 2 bathrooms, on at least a 1/4 acre in town. We kids didn’t need to share a room, and we had a couple of spare rooms in the house. Both had 2 cars, but my grandma almost never drove out of town, so it didn’t cost her much (I’m sure they were bought used). My parents, however, put 50k miles a year on theirs working in the city.

    What I find has contributed to my *choices* that cost me more money are primarily that:

    a) I did not want to live in the same small town, so I am now paying 10-15x what my mom did (in 1970’s dollars) for a house in the ‘burbs (in today’s dollars, the suburban 10 year old house values at 6-8x what her old small town one does),

    b) college is generally expected of our generation, so I am the proud owner of five-figures’ worth of student loan debt,

    c) we can’t (and I wouldn’t anyway) work on the car in the front yard like my grandpa did- both because the city doesn’t allow it and because today’s cars don’t facilitate it the same way,

    d) I refuse to use oleo on my toast or feed my kids most of the inexpensive HFCS-filled or processed foods (of course, food is so much cheaper for us than it was for them as a percentage of income). I also don’t have the temperament or weather for a full-yard garden to help with produce,

    e) I pay a ton for good health insurance, full coverage for my cars, homeowner’s insurance (remember in grade school- the kid whose house burned down and they just lost everything? No one had homeowner’s or renter’s insurance then), enough life insurance to make sure my kids can still go to college, and a chunk in to my 401-k. All things my parents didn’t have to deal with or couldn’t think to afford.

    So a lot of the reasons we spend more money are because of conscious choices, obligations our parents didn’t have, and- like everyone else has mentioned- the little luxuries we consider necessary now (like internet access). Incidentally, my parents also consider internet access necessary now, so it’s not just a generational thing, it’s keeping up with the times.

  69. Scotty says:

    Good post Trent, definitely makes you think.

    With technology comes convenience, at a cost. One or two hundred years ago, one would have virtually no bills at all. Perhaps a small property tax and a church tithe, but that’s about it. The thought of paying for electricity or cable would have been unthinkable, because it didn’t exist. That generation didn’t make that choice, they used what was available to them at the time and by their means. I have a hard time thinking we’re slaves of technology, because my parents simply didn’t have the technology available to them. Sure they didn’t have the internet, because the internet didn’t exist. But my great-grandparents didn’t have a phone bill, because that didn’t exist. Their great grandparents didn’t cable, electric, water, or sewage bills, because virtually all of those things didn’t exist in the capacity we know them today.

    I don’t know, this post rings all sorts of opposite emotions for me.

  70. Margaret says:

    Just a comment about wells/septic tanks. Sure you don’t have month to month bills, but digging a well can cost well over $10,000, and no guarantee that they will come up with water. Even if you have a well, if something happens to the pump, you are looking at several hundred dollars to replace it, and that’s assuming you can do it yourself (not to mention the fun if the problems happen, as they invariably do for us, when it is -30 to -40C). My moms well collapsed a couple winters ago, and because it was winter, she was hauling water for months. She said she didn’t mind because she had grown up without running water, but I would have lost my mind with my three little kids. Septic tank — there is that annual bill to have it pumped out, and they also have to eventually be replaced. Right before we bought our place from my mom, she replaced the septic tank to the tune of $5000, I think. Hopefully that will last us another 20 years, but still not free.

  71. Kim says:

    It isn’t just the expenses, it is the possessions. An elderly friend of mine was raised (along with 9 siblings) in a 900 square foot home, that she lived in into her 70s. Friends come to visit us and are surprised to find us living in 2000 square feet, which seemed more than adequate until the parents moved in and one of the kids moved back home. Still, it will have to BE adequate.

    The couch my parents bought they kept for 30 years. They drove the same car for 23 years. I don’t remember clothes coming from a store until I was in my teens and started buying my own. Maybe an occasional thing from Sears or the Penneys catalog.

    I don’t think we ever had a new appliance, nor did we have a ton of kitchen gadgets.

    When my husband and I got married we didn’t own an electric can opener, a blender, a mixer, an electric coffee maker or a TV. This was in the early 80s! Our friends thought it was nuts, but I was able to bake bread, whip cream, etc., etc. with a spoon, a whisk, a bowl and a lot of elbow grease.

    Now I have become addicted to my conveniences. I don’t use my bread machine because I prefer the touch method for testing dough, and prefer the texture and shape of loaves I make by hand, though I am not averse to starting the process in my kitchenaid.

    My husband doesn’t remember shaving with a straight razor, but I do. Now we are told that a triple or even quad razor blade isn’t enough, but that we need 5 blades to get the job done.

    Along with the conveniences I think we have lost some of the pleasures of life. I have to maintain a printer, computer, router, laptop, stereo, direct TV, dvd player(s), cell phones, etc., etc., etc. My dog doesn’t need merely to eat dog food, but to have special diet food, regular vet visits complete with blood work that cost more than most developing countries spend on a human in a year. When I was a kid a dog was a dog, and while we took care of them, no one thought of replacing a canine hip or some of the other procedures formerly reserved for humans.

    Although I resist the big screen HD tv thing, the Ipod, the BlueRay, the texting, etc., I find somethings have become a requirement simply because of the change in the world around me. For instance, I could no longer resist cell phones when the pay phones began disappearing. Vehicles are nearly impossible to maintain and repair on your own anymore due to the computerization of components.

    Also, for the most part, things aren’t built to last. Case in point–Bell Telephones. If you have an old Bell phone, you still likely have a working model but you’ll have to pay more for a rotary line. I average a cell phone a year. They simply aren’t built for the long term. Some of this is our own fault. We have become a Wal-Mart culture, and either we don’t know how to spot quality in the items we purchase or we don’t care.

    In some things it is virtually impossible to find a product built to last. My precious Levi jeans used to be dynamos. They fit right, were constructed well and lasted for years. A couple of years ago, they changed my Levis. Now they are a different cut and instead of being heavy-duty, now include Spandex and are much lighterweight material. My last pair (for which I paid the ordinary price after searching in vain for ones made the old way) wore out in less than 4 months! Completely unacceptable.

    Now that most of my friends and relations are online, and now that many, if not most, jobs are posted online it is difficult to avoid internet service. How does one stay connected to the phone phobic, email-manic world otherwise? Even my church sends its information not through phone chains as was done when I was a kid, but almost exclusively through email.

    The point of this is that, as others have pointed out, we do have expenses our parents didn’t have, and some of them we don’t have a lot of control of. For me, however, I am learning to research things better. I pay a higher price for my internet service, but I use a local company, which is something I highly value. I do make every attempt to ensure that clothing I purchase has lasting value, and am searching for a replacement for my Levis(sniff). I research how a car is built, and study designs so that I am purchasing classics that fit into my esthetic but also will not be “out of style” in no time.

  72. Gail says:

    I’ll give up all of my “luxuries”, just to go back to the days of stay-at-home moms, safety for our children to play outside unsupervised, and the ability to have affordable foods that are not processed with added chemicals.

  73. Michelle says:

    My husband and I live in a very expensive area of the country and are at the moment living on one income. We’ve had several incidents where emergencies with our car, with unexpected tax expenses have come up. I resent the statement that a few folks have made here about it is the doing without the luxuries. We do not have cable, we borrow extensively from the library, we eat in, don’t go on expensive vacations, etc. It is stressful living like this. I would give anything not to have this feeling. I am sure I am not alone.

  74. Melissa says:

    In addition to the increase in bills, families face increased federal and state income taxes. The increase in the tax rates forced many families to add a second income. All of the “luxuries” came along when families saw a loss of their free time because of career requirements. When one spouse/partner is able to stay home and take care of daily family matters, the evening is freed up to spend time being a family.

  75. Charley says:

    What is surprising in the comments is the lack of focus on the effect of increasing taxes. In comparison, most everything else is pretty much background noise. If you look at the data from the government website http://www.gpoaccess.gov/USbudget/fy08/hist.html
    you can see that Federal Goverment revenue per person has increased from about $534 per year in 1962, to about $8000 per year in 2006. The main sources of this revenue are individual and corporate income taxes and Social Security taxes, all of which we either directly or indirectly pay for.

    There has been some lament that the days of the single-parent breadwinner are gone. This did not happen because we want more stuff, but instead so that we can pay our crushing tax burden. It’s especially insidious to have to pay for child care so that both parents can work to achieve this.

  76. Charley says:

    I did some more cyphering related to my previous comment (#58). If you account for inflation, that $534 per person in revenue per year in 1962 grows to about $3600 per year in 2006 — much less that the $8000 that the government actually raked in that year. So inflation does not come close to explaining the increase. In fact, since we pay for corporate taxes in the cost of goods and services, it seems that increasing taxes is in itself inflationary. By the way corporate tax revenues increased from about $21 billion in 1962, to almost $838 billion in 2006 — an increase of almost 40 fold.

  77. Charley says:

    The more I think about this, the more I have to say. What is really galling is that even with these tremendous increases in revenue that the government is garnering at our expense, they spend soooo much more than that. With a $10 trillion deficit (or 10,000 billion, or 10 million million to add a little perspective), the prospects of this burden decreasing in the future for us or our kids is just about zippity do dah.

  78. Naomi says:

    I live in the UK, where the equation is somewhat different (though not vastly different); here it’s very clear that housing costs are a major issue. I have a book “Schott’s Almanac” with a wonderful graph in it showing the problem very accurately. In 1986, the cost of the average home in the UK was 2.8x the average salary in the UK. In 2007, the cost of the average home in the UK was 7x the average salary in the UK.

    Essentially what this means is that if you want to live in an average home, you need to earn a substantially above average salary, and you probably need both partners to be working. My parents bought their house in 1973, and keep telling me “it was terrible, in the 1970s mortgage rates went so high we had hardly any money left for food”. And I reply “but at least you were able to get a mortgage for 3x my dad’s salary and that bought you a three-bed house with a garden!” 3x the average salary in the UK would barely buy you a one-bed apartment now.

    We’ve been in this weird situation where you need a vast amount of income to buy an average house, but your monthly payments were actually fairly low (this is of course what tempted a lot of people to lie about their annual income to get a mortgage; they only looked at the ‘monthly payment’ and saw it was affordable). It means that many families have a large mortgage, the two-incomes they needed to get that mortgage, but lots of disposable cash because they’re doing the equivalent of ‘making the minimum payment on your card’ on their mortgage every month.

    It’s not that the many little luxuries are what’s causing us to need two working parents. Families need to have two working parents to get the mortgage, and then find that – unless they’re disciplined and pour all their spare cash into paying down the mortgage quickly – they fall into spending their extra income on little luxuries.

  79. Sarah says:

    One thing I do like about this post is the emphasis on the idea that you could give up certain expenses if needed. I know a family who literally went bankrupt and lost their house, but never had their satellite tv shut off, never had their internet shut off or downgraded service, and still had both landline and cell phone services. Pretty stupid, if you ask me. But to them, they “needed” these things and they were “bills,” not luxuries.

  80. Ivy says:

    Our insurance agent sends us a birthday card every year that includes a flier listing the cost of items the year we were born versus the cost of items now — along with the average income (we are in our late 30s). One day I ran the numbers and determined the following:

    Consumer goods and commodities are the same or less relative to average income. A gallon of milk now costs the same as back then — as a percent of what people made.

    The two listed exceptions:


    Which were both an order of magnitude higher compared to income. To that list I think we can agree to add college tuition and health care.

    Naturally the modern “average” home or car is bigger/safer/fancier than back then. Still there’s no doubt that even a basic house or car costs much more than it did three decades ago.

    In addition, I would argue that consumer items have to be purchased more frequently now due to planned obsolescence and / or low reliability and quality. A phone, oven, couch, or even bedsheet won’t last as long and therefore will need to be purchased more frequently. Linens, dishware, cooking utensils and so forth used to last effectively forever. People would hand them down. My parents first couch lasted 40 years before they chose to replace it. Our couch lasted three before literally falling to pieces.

    I agree that bills like cable, cell phone, etc. are extra expenses that didn’t exist in the past however they are small in comparison to the major expenses that have increased the most.

    So, three conclusions:

    1. Do everything possible to keep the major costs of housing, transportation, health care, and education down as much as possible. Spend the effort there first, rather than worrying about your cell phone minutes.

    2. Then expend the effort to find quality wherever possible. This is difficult as even paying more won’t always work. You might have to buy old instead of new to get things that will last. But the less frequently you have to purchase basic needed items (no one will argue, I hope, that an oven, furniture, and basic housewares are necessities).

    3. Then analyze the extras to see whether they are really needed.

  81. Liz says:

    I’ve been a SAHM for 8 years. My husband is a SSGT in the Air Force, so you know he’s not making a ton of money! We have 3 kids and one dog. We own a house and that is the only debt we have. The way we stay on budget is we take out a certain amount of money in cash every week to cover food, gas and anything fun we want to do. We then put the money into separate envelopes and then that’s it for the week. Over the past 2 years, we’ve saved enough money for 2 vacations a year and paid cash for christmas and birthdays by doing this. We also save $4,000 for our IRA and $7,000 in our long term savings account per year. This is out of a $57,000 per year income.
    I’m telling you guys, PAY CASH and save.

  82. A well may or may not save you more money honestly. You won’t have a water bill, but the electricity required to use your pump will cost you more money.

    I cut cable out all together, and I went to having only a cellphone instead of having a home phone too.

  83. steve says:

    I’m sorry guys, but I have to ask. Do Americans have to pay to have their garbage taken away?? As a Canadian, I just pay my taxes and that’s all I need to worry about. Garbage service is a necessity, not an option.

  84. Melissa says:

    Yeah…I wish I could maintain the cost of living my parents have. They live in a rural area where burning trash along with composting is fine. All the other items go into recycling bins…which they have the inconvenience of needing to drive them to a drop-off center. Our average home price in the greater Philly area is 3x-4x more than the average home price in my parents’ area. They have a shallow well / septic and it has its pros and cons like anything else. Your water usage can be highly limited depending on average rainfall. You typically have costs associated with a water softener/purification system, also. Y’know, unless you want a glass of brown, sulfur-smelling drinking water.

    The major difference between myself and my parents is student loan debt. They never dealt with it as they didn’t attend college. It’s a debt I’m completely okay with as its allowed me greater opportunity.

    I guarantee the amount my parents spent at disco clubs in the late 70s (with inflation factored in) probably trumps what I pay on a monthly basis for entertainment. I’m cheap in that regard.

  85. Lisa says:

    My bills are essentially the same as those listed except I also have internet. We don’t support any kids and we did have one income for a long time. And we only had car payments for the first 2 years of marriage that is now paid off. So now we have enough stashed away that if we had to replace our car we could afford to replace it with a used one and pay cash for it.

    Our health insurance is crazy high, $900 a month. My husbands work pays a measly $300 of our $1,200 plan. I bet health insurance didnt used to be that expensive.

  86. Lisa says:

    Bugs me that people insist they need cable because their reception is terrible and without it they’d have no tv at all. I turn on my tv maybe once or twice a year when we have inclement weather to decide whether to go downstairs and that is the extent of our tv usage!

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