Introduction, article on 1949 spending vs today

[igthebold]

Hi folks,

I'm Jimmy, a wannabe mustachian from NC. I just downsized and relocated my family to cut down on cash flow, and am in the process of overhauling the finances to boost the savings rate.

Saw this article and it looked interesting: http://www.npr.org/blogs/money/2012/04/05/149997097/what-americans-buy?sc=fb&cc=fp

It compares 1949 spending vs today. Nothing really surprising there, aside from the clothes (to me, anyway). People dressed better and spent more money on clothes. More surprising to me was the recreation category. I'd assume that people spend way more on entertainment these days. Go figure.

Jimmy

[AJ]

I don't feel like it is very helpful to see this information as percent of total spending. I would rather see it as inflation-adjusted number.

For example: Take a fictitious family that spent only $100 a month and only needed food and housing. In 1950, they spent $40 (40%) on food and $60 (60%) on housing. In 2010, they spend $10 on food and $60 on housing. Now it looks like their food expense is 14% and their housing is 86%, even though they didn't increase their housing costs. I'm not saying that is necessarily what has happened, only that the way the data is being presented can be misleading.

[igthebold]

I guess what's particularly useless about both views is that it doesn't take into account spending as it compares to what people *need* to spend. And since every family has a different situation, "need" might look wildly different, and the whole thing will be come pretty subjective. :)

I thought it was interesting anyway.

Jimmy

[velocistar237]

From what we know generally, I think we can safely conclude a few things. People spend a lot more on housing, transportation, and medical care today than they did in 1949. Production efficiencies have pushed the cost of food and clothing down, but we buy way more pieces of way-lower-quality clothing than before. People used to have a small number of tailored pieces that they would keep for a lifetime. We also waste a lot more food than before, but food still ends up cheaper, meaning the production cost has shrunk enormously.

[Sauce]

yeah, these charts aren't really painting a picture for me.

i dont think we can conclude much from this. It's quite obvious homes cost much more today than in 1949, so that would lead to a higher percent of our spending, but can we really say that we spend more or less on food now vs 1949?

i would prefer to see something about disposable income spending after food/rent is paid

[chrissyo]

I don't feel like it is very helpful to see this information as percent of total spending. I would rather see it as inflation-adjusted number.

I agree. I haven't fully read the article, but just looking at the charts, there's also no comparison to average earnings, savings, education costs or debt levels.