We all know that time keeps moving on and waits for no one. It is amazing to reflect on the advances in technology many of us have witnessed in our lifetimes. The rise of personal computers, cell phones, the Internet, and instant communication is unprecedented. Could you imagine trying to predict and explain this to someone a generation ago? We would like to explore 4 significant lifestyle changes in the past 40 years that have made a significant impact on our finances.
The pace of change with the technology is amazing. Gordon Moore, co-founder of Intel, noticed this trend forty years ago:
Moore’s Law is a computing term that originated around 1970; the simplified version of this law states that processor speeds, or overall processing power for computers, will double every two years.
Could he or anyone else have imagined the impact this would have on our lives?
We will examine four common lifestyle changes that have occurred over the past 40 years. Let’s review them in order of the most expensive first.
1) Housing square footage and people per household
Housing square footage increased between 1975 and 2010 from a median of around 1,500 sq. ft. to nearly 3,000 sq. ft. This represents a 100% increase, or a doubling, in the average size of our homes. The term “McMansion” was coined to describe this trend of super-large homes.
Maybe our family sizes have grown and we need more space? Nope, actually the number of people per household has decreased from three to about two and a half. This reflects an approximately 17% decrease.
The trend of the average house increasing in size would seem that we have adopted the “bigger is better” principle. Why else would square footage need to be increased when there is an actual decrease in people living in a home?
The last surprise is that the average percentage of total household income needed to either own or rent is hovering at about 50% of American’s total expenses.
2) We own more cars
When we look back at the year 1969, nearly 70% of households had no vehicles or only one vehicle. Fast-forward to 2009 and that trend has nearly reversed, with only 40% of households with one car or less. Owning one car today can be socially awkward since this is considered unusual behavior.
The new normal is to own three vehicles. It seems we cannot own just one car per person today. The data has shown three-car families have grown from 5% to nearly 25% over this period, nearly a 400% increase. If you have five people in a household, there will probably be six vehicles.
This has not been a great development for reducing our transportation costs. We now need to maintain, repair, fuel, and insure more vehicles than before. Of course, we now need to have larger garages to store them. Unfortunately, those garages are probably at capacity with other stuff.
3) TVs now occupy nearly every room in the house
I can remember when our family purchased our first black and white television. The next great milestone was when we bought a VCR that had a wired remote control. This eliminated the need to get up from the couch to stop or fast-forward the tape. It was a wonderful invention because, as kids, we had to do the work of changing the TV channel or managing the VCR tape. This new handy remote connected us to a wonderful recording device and kept us planted on the couch.
Today, many homes in America have flat-screen televisions in nearly every room.
We have seen the number of TV sets per household increase from 1.57 in 1975 to 2.93 in 2010. We effectively doubled the number of sets per household. Today there are only 17% of households that own one TV, while 55% have three. Yikes!
I am afraid to look at the statistics on how much time our country spends watching those three televisions. The programming subjects us to a constant bombardment of advertising messages. We are frequently reminded that our lives are incomplete unless we buy what advertisers are hawking. We need to own the new house and car and take exotic vacations. How about needing to buy that next cell phone? Speaking of cell phones…
4) Phones have moved from the house to our bodies
I can still remember the days when my parents had one phone that shared a “party line” with other people. You also needed to use that old school rotary dial, giving your fingers a dialing workout.
Americans went from owning 340,213 phones in 1985 to 300,520,098 in 2010. We own 300 million phones!
Our society has become a “we want what we want, when we want it, where we want it” culture. Take a moment the next time you are standing in a public line somewhere and notice your surroundings. People have become mesmerized by their smartphones! It seems that can’t miss a single minute of action.
Welcome to the new normal.
I’ve pointed out four trends that have increased significantly over the past four decades: our homes have gotten larger with less people living in them and we own more cars, TVs, and cell phones. For me, the cell phone has become a double-edged sword in that it has given me mobility yet also has me feeling a bit too connected.
Everything changes and nothing stands still. – Heraclitus of Ephesus, c. 535 BC – 475 BC
What is important to consider—especially for us in the frugal and early retirement crowd—is how the pace of change influences our expenses. Today’s rate of adoption has become the new normal—a classic example of “lifestyle creep,” where we could not possibly live with last year’s model 6 when the version 7 is slated for release next week. In fact, we should probably wait in line overnight to buy it!
This can be a very expensive lifestyle, trying to be current on all the latest inventions, services, and manufactured products that once were considered extravagant. Now these wants have become default needs. It is high time to be aware of what this is doing to our expenses and the impact that constant upgrades and updates can have on us.
Young says
My husband and I live in a house that is over 3000 sqft, 4 bedrooms, and 4 restrooms. All houses in my area were built at the same time. We’re living in taxvania(nick name for PA), therefore we have a brand new, lofty property taxes. State tax and state tax on 401k, local tax, right to work tax, and per capita tax. Living in a house like mine is really wasting money for us but I have my reasons for now. A big HD TV and all other kinds of electronics are must to have, even for penny pincher like me. What can I say it better? They are just so nice to have.
Bryan says
Wow, a 3,000 sq. ft house! Do you have any children or any other family at home? Do you clean it yourself?
We struggle between downsizing to a RV trailer or up-sizing to the mini McMansion. It does appear the next phase will be downsizing for us.
The ideas from the post were a way to keep a healthy perspective for me on how good we really have it. We have a three bedroom two bath home, one TV, two cars, and two cell phones. Therefore, we have not ignored the technology trend, but we are trying to recognize what it does to us by trying to keep up.
Take care!
Holly@ClubThrifty says
I think we buck the trends for the most part. We live in a smaller than average house for our area and are planning to go down to one car soon!
Bryan says
It seems like you and Greg have avoided many of the traps with spending. The fact that you both work from home will make the transition to a one car family home much easier.
Check out this post on being a one car family and this book called How to Life Well Without Owning a Car by Chris Balish.
Luke Fitzgerald @ FinanciallyFitz says
Love the analysis. That’s great perspective. The “new normal” is my normal – I’ve never really experienced anything other than that. It’s crazy to think how much will change when I’m writing from your perspective.
Luckily, my wife and I have never felt the need to keep up with our generation of needing more/better/more/better. I’ve always had a skepticism (healthy and unhealthy) about “new things”. Technology is great…but also not great. There are tradeoffs, i guess. As we invent more technologies we also invent more ways to kills ourselves.
I would like to think my generation is better than the last, and the last was better than the one before that and so on. But I’m sure that’s entirely accurate. In some ways yes but in others no.
Bryan says
The advantage of age is that you have seen many things happen before, since history tends to repeat itself. Luke, I follow many twenty and thirty something bloggers in their journey. I enjoy their approach and hope that in some fashion we can help them from repeating some of the same mistakes we made. 🙂
You and your wife on the right track about evaluating “new things”. We are all trying to do better than our previous generations from a technology standpoint and lifestyle. Taking a moment to understand that our new normal doesn’t necessarily make it better for us from a time or cost perspective is important to consider.
Andrew@LivingRichCheaply says
We live in the NYC area so we’re used to smaller spaces. We just moved to a “bigger” apartment…about 800 square feet from 600. It’s me, my wife and a toddler. As for the car, only one because parking is tough to find on the street and you’d have to pay for a parking spot in a garage. Plus public transportation is pretty good here. With regard to the TV…just one, not much time to watch anyway! But for the last one…yea sadly, smartphones are attached to us nowadays!
Bryan says
Andrew,
Thanks for stopping by and commenting! 🙂
I have to show my wife your comment about living in an 800 sq. ft. place in NYC. We are struggling with the notion of downsizing to @ 1,300 sq. ft. for just the two of us and “The cat”!
It is amazing how attached we have become to our phones. It only leaves my pocket when it is charging and I sleep…. and when I shower.
Take care!
Bryan
Lance@HealthyWealthyIncome says
I just gave a presentation to a group of 200 people that was almost identical as this. The numbers are pretty sobering when you actually put them in front of people. We simply own more “stuff” than ever and there is less of us around per household and often less savings as well. Lots of investment in to debt. Nice research.
Bryan says
Lance,
Thanks for finding us and commenting! 🙂
I was amazed at some of these trends with homes, cars, TVs, and cell phones when I was researching this article. I expected that we have been up-sizing our lives over the years, but this really surprised me. We are conditioned as a society it seems to continue this upward momentum of more is better. All of this has the cost to us of needing to “work for the man” longer.
I am curious how your presentation went. What was the context for talking about this kind of data? Were you talking to a frugal minded crowd?
Cheers!
Bryan
DP @ Someday Extraordinary says
Good and intriguing information here! Really shows – unfortunately – what people value these days. It seems like the more we become connected to the rest of the world, the more information we have at our fingertips, the more we learn about the world around us, the more we would lean towards downsizing and simplifying. I would venture to guess more people ARE simplifying and downsizing, but even more are going bigger and collecting more. That gap of the middle ground has likely increased over the years. Anyway, good information here; keep up the good writing!
-DP
Bryan says
DP, I appreciate your comment and reflection about the amount of information we have today. I agree with you about your guess that more people ARE simplifying and downsizing, but even more are going bigger and collecting more. It is weird that we have both trends today in this country. There is no chance of the up-sizing crowd slowing down anytime soon.
My prediction, we are all going to wake up one day and realize we are in the Matrix. That is when the tide will change and it might actually be cool to have no cars, TVs, or cell phones! 🙂 We may have a long wait….
Take care!
Redeemed Finance says
1) Used to live in a 3k+ sq. foot home (parents) – now live in a 1.4k sq. foot apt and feel that its more than plenty in an NYC suburb.
2) One personal car – One work car – both mine, gf has none
3) 6 rooms but only 3 T.V.s so I guess that’s a good thing. (kitchen and dining counting as a room)
4) New phone every 2 years – check
Although I agree that it may be lifestyle creep per say, as shown in your statistics it’s increasingly becoming the norm. In a society where “more” is happiness I doubt those numbers will ever stagnate or reverse trend.
Bryan says
Rich the challenging part about the statistics is that they have become the new norm. Let’s project out forty more years, we will need a 6,000 square foot home, four cars for two people, and six TVs for our household. My guess is we will only carry one cell phone each. Is this sustainable and where does the trend stop?
Who can speculate what the next must have device will be, the items we must own in the future, that we don’t have today. 🙂
BTW: Excellent post over at ARB! Here is that link folks. Rich, I sent you an email to sign up.
Steve @ Think Save Retire says
Hey Bryan!
Our lifestyle inflation in this nation is just incredible, isn’t it? Everything has gotten bigger in our society. It’s the whole drive for MORE that’s seriously ruining people’s financial futures because the concept of “having more” is never truly attainable. Once you have more, you still want more. It never ends, and neither do our working lives.
I’ve wanted to write an article similar to this one for some time, but you’ve already done it! It is a sad state of affairs when we, as a society, are so reckless with our money, but still view retirement as some mystical end of our working lives that seems just so very far off.
It doesn’t have to be!
Bryan says
I agree with you Steve, it doesn’t have to be this way! The challenge is being sucked into this way of thinking. I have to reset myself on occasion when our spending starts to inflate.
Those of us that want to escape the rat race early have to keep vigilant on our journey, bucking the trends, family expectations, the Joneses, and advertisers. The personal finance game is stacked against us.
This community is great because it helps us stay focused on our ER goals.
Mr. Budgets @MrandMrsBudgets says
Great post Bryan and it’s so true. Mrs. Budgets and I live in a 1150 sqft condo and we don’t plan to upgrade to larger place..EVER! We actually could live in a smaller place since Mrs. Budgets seems to sell anything that we don’t use on E-bay! I plan to leave my professional job after almost 10years early next year to pursue jewelry making. We are looking to live a slower pace lifestyle with Mrs. Budgets picking up with slack with her professional job. We are contemplating going with a only one car household once I leave the job. We have only one TV, which is in the living room and it hasn’t been turned on in months! I can’t say much for cell phones though. I think if they are used efficiently then they serve a great purpose when on the road. I even noticed my grandfather and my father on their cell phones at the last family function! I should of snapped a photo!
Bryan says
Mr. Budgets,
Thanks for commenting and welcome to Just One More Year!
Let’s recap, you live in less square footage than the norm, drive fewer cars, and own only one TV – you must be weird. How is that possible? But wait, it appears that weirdness has spilled over to other parts of your live. You plan on retiring early to make jewelry while the Mrs. soon working only when she darn well feels like it! 🙂
Folks, the Budgets family is a great example of some shifts we can all make in our lives that will propel us to ER and FI early.
BTW – I am the one in the household that will sell anything we have. Dianne keeps me in check. 🙂
Take care,
Bryan
Abigail @ipickuppennies says
We have a late-60s house, so we’re sitting at just about 1,500 square feet. Do I wish it were a little bigger? Yeah, a bit. But we don’t actually need the extra space if we just keep clutter down. And we try to declutter every month or three.
Bryan says
I think 1,350 square foot is a comfortable size place for two people to live (my argument with Dianne). In your situation, should you have children that might change your future home needs.
The benefit to a smaller home is less to clean, insure, lower property taxes, lower utilities, and less maintenance. This limits the room for that clutter to accumulate in the first place! 🙂
SherryH says
We live in a roughly 1900-square foot home-that’s me, my husband, and our two adult sons. It’d probably cost us more to downsize than to stay put, since it’s paid for.
Two cars, three drivers. In the near-absence of public transit in our area, that gets tricky sometimes, especially since one of our sons is a pizza delivery driver. No dropping him off at work and picking him up after his shift! lol
Here’s a funny for you: Three TVs, no cable. Younger son has our tiny old one in his room, not even plugged in. Older son bought himself a flatscreen, uses it for video games and video streaming. The big one in the living room serves as a monitor for the DVD player and VCR. Honestly, if it disappeared, it’d probably take me a week or three to notice.
Honestly, I’d have thought TV ownership would have declined with the advent of streaming and a plethora of devices to stream on.
Can’t say much about cell phones-we each have a smartphone. Honestly, I’d rather have my old flip phone back!
Bryan says
Sherry,
I am glad you found us and thanks for the comment. Welcome! 🙂
Looking at your situation, you are able to live in less than 3,000 square foot; have one or two cars less than expected, you are average on the TV’s per household, and are at the new standard for cell phones. That is wild that with the three TVs, you don’t have cable! You must be missing the bills….
Very creative in having four adults in the household, one needing a vehicle for work, yet you can manage in an area without much public transportation. I suspect you might actually walk, ride bikes, carpool, and plan/coordinate trips. I think I am attracting weird people to this site!
Weird in that you have a paid for home, no cable, and able to manage your transportation needs with less vehicles. You will probably tell me next that you budget, save money, invest, and do all those other kind of weird things. 🙂
Welcome to the club! Take care,
Bryan
SherryH says
Hi, Bryan! Followed you over from the comment section at I Pick Up Pennies.
We used to have the really cheap cable package that gave us the local network channels, but we went through a real financial crunch and even that had to go. There are a few programs I still miss now and then, but I was never much of a TV watcher, anyway.
We live in a neighborhood off a busy highway with narrow shoulders, so biking and walking places really isn’t a go. There’s paratransit-you can arrange a day in advance for the van to pick you up and bring you back-and a fixed-route bus from Wal-Mart to the county courthouse. We live about three miles from Wal-mart.
Our goal is to get a third vehicle when the younger kid starts working. (Kids are 20 and 22. Old enough to be in school or working, but a little young to shove out of the nest just yet.) I don’t drive, so once they move on, we’ll be down to one vehicle.
When the kids were little and I still drove, we had long stretches of getting by with one vehicle. Inconvenient at times, but not a huge ordeal.
Thanks for the welcome-glad I stopped by!
Bryan says
Now I am even more impressed! You must do some serious planning to coordinate your transportation in your family of four drivers. The fact that biking and walking are not a simple option demonstrates how dedicated you are to saving money.
If you think about it, the default answer to a problem is to purchase something. In your case, another car would solve that problem. However, that would create a new problem on the family finances.
We have attempted to adopt a “no cost or low cost” option first if possible. It requires us to find a solution that the last result requires using money.
ARB says
Boy, how things change. That statistic with the phones blew me away! Shouldn’t have, yet somehow did.
I can’t believe that people live in such huge homes with so few people! I would never want anything like that. All that money down the drain so you can maintain a larger house and yard? You’re paying extra money to do more work? Why would anyone want that?
With the TVs, I can’t help but think of the scene in “Back To The Future” where Marty is in his mother’s home during her teenager years and she asks him if he has a TV. When he replies that he has two, the kids at the table (his future uncles) are in shock and his future grandmother tells them that he is joking because nobody can have two TVs.
Imagine how things will look in 2055.
Sincerely,
ARB–Angry Retail Banker
Bryan says
ARB,
I can only imagine an article you could write about the changes in the banking industry over 40 years. How about some credit default swaps, no doc mortgages, or bill payment fees? Hmmm… sounds good!
Totally forgot about that Back to the Future reverence regarding TVs. Whenever I happen to run across an episode of the original episode of Star Trek, I can’t believe how creative Gene Roddenberry was with coming up with Sci-Fi gadgets. Communicators, automatic sliding doors, tri-quarters that scanned our bodies, ways to track people and things, the list goes on. No transporters yet but we can send email very easily. 🙂
Cheers!
ARB says
I might take that idea, Bryan! I’ll give you credit for it, of course.
Stockbeard says
Family of 4 living in 900sq. ft. We don’t own a car, we have 2 cellphones and one TV.
I win?
Bryan says
Folks, we have a winner here (so far)! 🙂
Can anyone top Stockbeard’s strange and unusual lifestyle regarding his residence, cars, TVs, and cell phones? You will have to beat this:
– Less than 225 square footage per person in your residence
– Must have no cars
– Will need less than .5 TVs per person
– Less than .5 cell phones per person
I do suspect Stockbeard has small children that might skew our calculations. With all this massive brainpower reading comments like this one, we could probably come up with a rating system to show how well someone kicks butt on these 4 lifestyle changes!
Cheers.
Stockbeard says
Yes, you got me, our kids are very young! (4 and 1). Not sure we could live in 900sq ft with teenagers 🙂