Do people generally expect to spend more money these days?

In My Humble Opinion
1

My wife and I just had a discussion, after reading something in the paper about who spent what on a date. My wife said, “I was a cheap date, wasn’t I?” And we both agreed that a difference between us and our adult children is they don’t seem to understand how little money we had when we were their age. (This is NOT a criticism of my children.)

As a society, are we at a point where the expectation is that you are to spend more money for enjoyment - or even mere existence - than in past generations?

Obviously, there were wealthy people - and likely spendthrifts - in every generation. But ISTM that in my parents’ generation (born in the 20s) and mine (born in 1960), frugality was more the rule than it is now. You had so many fewer “fixed costs.” TV was free (tho the set was more expensive.) Phone usage was much cheaper. Admission to many museums were free, as was street parking. People lived in smaller homes, with a single car, and clothing and furniture was used and handed down until it wore out.

I’m not yearning for “simpler” days. And I readily acknowledge the benefits from many technological and medical advances. And I do like my personal comfort. But am I totally off base in my perception that these days it is generally accepted that you simply spend money more readily than you did in the past? Is this a result of our increased wealth? Or a success of PR convincing us that we need what money can buy - or making it easier for us to unthinkingly spend money (automatic withdrawals/debit cards/etc.)? Other factors?

2

Not in a position to write at length just this minute … but I think the answer to your question is an unqualified “yes”. Way more “have to haves” today than there were in the past. Even going back 20 years, there were significantly fewer “have to haves” – comparing the late 2010s to the 1960s, the world of consumption as existed then and now are totally different worlds.

3

I think you’re at least partly right, but I’m not sure how much of it is a matter of nowadays vs. previous generations, and how much is a matter of level of wealth, or class, or urban vs. rural, or age level, or personality, or other things like that.

4

I think the biggest difference is the easy access to credit. It encourages spending.

That said, I feel like my family and I live very simply. We do have two vehicles, but one (mine) is 20 years old, so we only have one car payment.
We rarely spend money on entertainment. I can’t remember the last time I went to a movie theater. We eat out sometimes, maybe once or twice a month.
My wife and I both have pay-as-you-go cell phones which comes out to under $20/month combined. No land-line phone.
We pass down clothes among the kids until they wear out.

I don’t know how much simpler we could live without starting to get counter-cultural or radical, really.

5

You pretty much nailed it with the “increased wealth” theory- savings rates, which in the US have been declining pretty steadily since their high in 1975, are an almost mirror image of changes in household wealth. While increased consumption is a contributing factor, it is only one. That, and several other factors, are discussed on the St Louis Fed site. In a nutshell, on average US households have more wealth today, higher income (and the confidence that hose income levels are sustainable) and easier access to credit markets. As the economy and financial markets have changed, people feel less need to save from current income and rely more on future income.

6

I agree with this generally, in that it cost more to just exist nowadays.

I am not an economist, but stories about the trends of how much thing cost relative to income definitely resonate with me. Some will argue that what we get for our money, in terms of “increased productivity”, means that even though the price is more the cost is less. To them I say, faster WiFi and access to 10,000 TV shows won’t feed my family. (Yes, yes, globalization and interconnected communications and faster shipping means I can get fresh blueberries from Chile all year, blah blah blah.)

But I also struggle with the fuzzy fear that I am simply getting older, and appear like the proverbial grandpa leaving a $0.35 tip for breakfast, because that’s what I’m used to. My generation absorbed the expectations of my parents and grandparents who came through worse times and lived frugally. Maybe that is a concept that has lost traction in younger generations?

At any rate - we do know that US wages have been stagnant for decades. Workers haven’t reaped the financial reward of all this “increased productivity”. Billionaires are richer, so YAY! I guess.

We do know that the prospect of a middle class lifestyle with only one parent working is mostly a story old people tell.

We do know that a University education now often requires a lifetime of debt to pay for.

We do know that auto financing is now extending out to 7 & 8 years, where in the past it was shorter.

Medical costs, both direct and insurance, seem to be on a rising vector.

And we now expect to pay for WiFi, Cable, a cell phone, and number of entertainment subscriptions. These are mostly all something we didn’t have to pay for in the past.

So, yes, the awful “they” have gradually (like the boiling frog) convinced us that we should expect to pay more for everything nowadays.

7

That fed site was interesting. So we are wealthier, but save less. :smack: Which translates to spending more.

But that article focuses on effects on the economy, more than on individuals. I perceive somewhat of a feedback loop, where people feel they need to work and spend more and save less to satisfy their needs and wants. A couple HAS to work 2 high-paying jobs to afford the lifestyle they desire/expect. Thereby they HAVE to pay childcare. Young people pile up education and consumer debt. Older folk feel they DESERVE to retire, but have not saved enough to. As EscAlaMike says, stepping back from that cycle makes one feel like a counter-cultural radical.

I feel like the historical priority of needs has been shuffled, with a whole lot of “wants” being added in there, with insufficient thought as to the associated costs.

8

Easy credit is a major factor in this, I believe.

“Back in the day”, if you wanted a high-dollar item, you had to save up for it while eschewing other tempting purchases. Discipline and patience were a requirement.

Now, you no longer have to wait until you have enough money to make a purchase. You just swipe the card and pay for it later. That has a massive effect on spending, and it’s human nature.

Here are your options:

  1. You can have a $10,000 car a year from now, after you’ve saved up the cash.
  2. You can have a $30,000 car RIGHT NOW, all you have to do is make monthly payments for the next several years.

The vast majority of people take option 2, which means car companies stop producing the $10,000 car and switch production to the more expensive models.

The end result is that consumers end up spending more, AND goods end up costing more.

9

I know you said you aren’t trying to romanticize the past, but it kind of sounds that way to me.

I don’t spend anything for music. I threw my CDs away years ago and stopped buying mp3s in the early aughts. I am content streaming music through free Spotify and free Yubetube. In contrast, my parents used to fill crates with vinyl records and cassette tapes. That couldn’t have been a cheap hobby.

I go to the movies once a month. When my parents were my age, their weekly date night always involved going to the movies. I entertain myself by watching movies on Hulu and Amazon. Granted, I pay for these things. But it is nowhere near the amount of money my parents spent on going to the movies (plus concessions).

If we want to go back to the 50s and 60s, middle class folks entertained themselves by having company over for dinner and hosting/attending cocktail parties. So people spent their disposble incomes on food, alcohol, home furnishings, and cocktail dresses. People still party today, but partying has taken a back seat to more introverted activites like gaming or Netflix-and-chill. These things really aren’t that expensive.

I do think there is more hype around having “cool experiences” today. And of course expensive experiences get more hype than cheap ones. But there is not as much pressure to have expensive things as there was in the past. Yes, homes were smaller back in the day, but everyone was expected to buy one (and eventually upgrade to something bigger). Nowadays, young people are not as fixated on the homeownership ideal since 1) a lot of them can’t afford it anyway and 2) they appreciate the downsides.

Young middle class adults in the 1960s also enjoyed more leisure time than they do now. When you have time to relax and smell the roses, you can make do with cheap thrills. But young middle class adults are working longer, more stressful hours. They are dealing with way more pressure. So yeah, they probably will blow more money on food and weekend concert tickets than their parents did back in the day. No Florida vacation for them.

To be honest, I don’t think it is your kids who lack understanding here.

Sent from my SPH-L710 using Tapatalk

10

All true. However, we should note that for many things, the quality has improved considerably and we can easily find good stuff to spend money on. Cars are more reliable, fuel efficient, and comfortable than a generation ago. Phones can do things that weren’t possible before (and long distance calls are now “free.”) TVs are HD and the sound is exceptionally good. I have lightbulbs in my home that will outlast me. We have better food in grocery stores, and more variety and quality restaurants than ever before. Instead of $1.50 for a bud, people are paying 4 times that for a local IPA.

So, to the OP, yes. I expect to spend more money these days. Even if you cut out the non essentials.

11

I’m only 40, but the biggest difference I see is homes and eating out. When I grew up, eating out was a special treat. Maybe once every couple of months. Now, it’s pretty much daily for a very wide swath of people. There are even people I know that don’t own kitchen utensils to cook their own meals. I know a family that has never turned on their stove. That would have been completely unheard of when I was a kid. Also, homes nowadays are crazy nice. I grew up in West Virginia, so that skews things, but probably half of my class lived in small homes that were decades old or older. More people living in trailers and quite a few that lived in ‘shacks.’ Probably 1400 square feet or so was the norm for a home. I remember my friend who lived in a ‘mansion’ and his home was maybe 2200 square feet or so. Now, it seems that half of my son’s class live in McMansions that are 2500+ square feet. The ‘neighborhood’ is also dying. Literally everyone I grew up with lived in a ‘neighborhood’ or ‘town.’ Now everyone lives in developments. It’s a really big shift. The housing payments they must have have to be out of control.

Cars I haven’t noticed. I see that everyone seems to have an SUV, but I think that’s more of a style than a real difference. I think I see a good number of older cars out there, at least early 2000s still on the road. I actually wouldn’t be surprised if fewer people have cars. It seems like the younger people don’t seem to have them.

12

Good observation re: cars. I would not be surprised to learn that car ownership among younger folk (say under 35-40?) was lower, and uber use higher than among older gens (over 35-40). And I’d imagine that you could take a helluva lotta uber rides for less than the cost of car ownership.

I admit that my perception may reflect a gradual ratcheting. When I look at photos of my parents when they were young, it is hard not to think of them a “poor,” even tho they were lower-middle/middle class. But I can remember more their situation when they were older and more prosperous. Then we adopted a higher standard of living, which OUR kids assumed was the standard…

13

OP and others may find the BLS Consumer Expenditures Survey of interest. You can look at the raw data and also at third-party analyses/commentary from the likes of Pew

14

Part of the equation is we have been moving from ‘buying’ to ‘monthly services’ . At one time we bought a expensive TV, sometimes a antenna then had free TV service for life. TV prices now are not that expensive compared to then, but the services are (cable, streaming).

Buy a iPhone, OK, you will most likely also need a iCloud data storage plan, (cell service), and that device is rumored to be 3-4 years (only 4 lately and perhaps due to Apples low cost battery replacement program and very high cost of a new device ), and many times financed. Apple is also trying o-so hard to get a person to lease a iPhone. So that too is approaching a service not a product.

15

I just always wrote it off to the advance of years. Minimum wage is a little over three times what it was when I entered adulthood for the most part and some basic things are around three times the cost of back then. Some things (like fast food) maybe a little closer to 4x but still within reason. There are other things though, mostly in the tech field, that look to have dropped considerably. Take my slide rule calculator which was over $180 in 1974 and the last one I got was a freebie with a purchase at a hardware store. :smack:

16

There is not a doubt in my mind easy access to credit cards has substantially increased people’s expectations of what frivolous entertainment costs should be.

Some things ARE cheaper; televisions, for instance, are, adjusting for inflation, much cheaper than they used to be. Clothes are cheaper. However, expectations are quite a bit higher in terms of small things. People eat out more than they used to, and it just seems normal to have boatloads of personal electronics. I know a number of couples who take multiple tropical vacations every year, something that just thirty years ago was unheard of among middle class folks.

17

I think that I spend a lot more than my parents did at my age. Well, I have one kid and they had 6, so they may have spent more in real terms, but I spend on things they wouldn’t have considered. That said, compared to my grandparents, my parents were wasteful. They THREW AWAY lightly-used aluminum foil. They bought Tupperware, when margarine tubs are basically the same thing. They had two cars. They had probably 5 times more clothes than my grandparents every had. ( I swear to god, my grandmothers on both sides had polyester clothes in rotation for decades). We ate out tons more (though tons less than I do now). We didn’t put in a garden.

And I dunno. By my greatgrandmother’s standards, maybe my grandmother was a crazy careless one, with her store-bought bread and her fancy electric washing machine.

18

Sounds like a lot of romanticizing the past to me when things were ‘simple.’

That expensive mobile phone and data plan are also quite a different animal than the old land line where you had to pay long distance and had to wait by when you were expecting a call.

Air travel is amazingly less expensive these days making it possible for almost anyone to travel. I’m stunned at how low international air fares have fallen, even ten years ago I wouldn’t have believed I could have multiple trips to Europe in a year.

Subscription services for films , tv, and music have at times reduced the cost but also expanded what you can watch. No more having to buy albums, CDs, or tapes and then get tired of listening to something in a couple of months. While I’m sure the rabbit ears era was free, that left you with three networks and maybe a couple of independent stations. I’d much rather have access to tv shows and films that appeal to me rather than reruns of Giligan’s Island or old westerns.

19

I think my perception may also have been colored by a shifting of peoples’ individual timelines. More folk used to get married and had kids earlier, which pushed back their discretionary spending until they were older. One anecdote: my 27 yr-old dtr mentioned buying some luxury good recently. My first thought (after appreciating that she can spend her money however she wants) was that my wife and I hadn’t bought anything that luxurious until we were quite older than 27. Of course, at her age, we had 2 kids and a mortgage already…

20

Not according to the Federal Reserve, please look at the links I posted, particularly this one. Median real income has been steadily rising since at least 1985. That is part of what is fueling the lower savings rate - people have more and are confident that they will have even more in the future, so the perceived need to save is diminished. Generally speaking, a kid who gets a candy bar every day, guaranteed, will eat it more quickly than a kid who gets one candy bar per month, maybe.

Yep, there are a smorgasbord of social and economic drivers behind the trend.