How we spend our paycheck
By Randy Butler
HCP columnist
The house I grew up in was purchased by my parents in the early 1960s. I was way too young to remember the hefty price tag of – $16,000!
My grandfather gave my father a good, “talking to,” about the great risk he was taking paying that much for a house. The house remained our family home for many years after, so I guess it worked out.
How did he pay for it would be a very good question. One lunch time in the fourth grade at Washington Elementary, several of us boys were talking about how much money our dads made. Now this was in the 1970s. Most dads in this backyard survey made between $50-75 per week. Much to my amazement, my dad came in first at $100 per week. Pretty amazing that $5,200 per year was considered above average income for a family of four.
How do those same numbers stack up in today’s world? Google showed some very interesting statistics. The average income has risen slightly since 1970. It went from $5,200 to $72,000. That’s a 1,384-percent increase! I did not compare it with the rise in the cost of goods but that’s a whole other story.
I took this research a step further. How do we spend the $72,000 of the average income? The results were easy to see, and we might need some help in that area.
An estimated 53% of Americans live paycheck to paycheck with no savings. In essence, if two consecutive checks are missed, it's game over for that family. That’s an astounding fact.
To take that even further into the dark world of financial ruins, a large portion of our working class has 51% of their check spent before it's even received. 40% has the entire amount gone in just 12 hours. It’s mind-blowing to me that’s how fast we spend our money.
But being totally transparent here, when all three kids were at home my financial world was a tough place to be. My wife and I made the decision for her to stay at home with our children. That made life tough for us, but we both still feel that it’s one of the best choices we made for two reasons: No. 1, if possible, in today’s world the family is better served if at least one parent stays in the home to provide the care needed for the children (my opinion); No. 2 , we both felt the money that was made would not offset the cost of childcare.
It was tough using that method to run the home. No matter how well we did making or trying to save our money, we always came up short. We didn’t have the SUVs, boats, campers, or any of the toys that some of us enjoy today.
Bottom line: We can all agree that wages have gone up, probably a little less than the cost of living. And once an item is at a certain price it almost never goes back down.
The folks that lived and worked before us seem to be much better at a budget than we are today. My thoughts are, they lived with what they needed, sprinkled in with a very limited amount of the extras.
It seems today we tend to live with what we need and everything extra our minds will allow us to think of. If you can’t pay for it, CHARGE IT!
Randy Butler is a longtime real estate professional in Highland County and a columnist for The Highland County Press.