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I HAVE BEEN ACCUSED of being too critical of America’s spending habits. I’m not in touch with families who live paycheck to paycheck, or so I’m told. I was roundly attacked by folks on Facebook, who claimed I lacked sympathy for the federal workers who ran out of money during the government shutdown—even before they missed a payday.
We all know there are Americans who struggle to get by on very low incomes. But that’s the minority. Let’s talk about the great majority of households—those that spend money unnecessarily. Consider three statistics pulled together by BecomingMinimalist.com:
I have eaten in homes in more than 15 European countries. Their homes are very nice, comfortable and, by American standards, quite small. The average size of a new home in the U.S. is 2,204 square feet, while in France it’s 1,228.
I was window shopping in Germany a few years ago and noticed the steep price of men’s shoes. I asked how people could afford the prices, which include a 20% or so sales tax. The reply: Germans don’t own many pairs of shoes.
By contrast, the average American owns 19 pairs, many of them never used. Given that many Americans prefer to sit in their car when ordering fast food or doing their banking, what are all the shoes for? Apparently, those boots aren’t made for walking.
Visit Rome or Amsterdam and your traffic risk is being run over by a scooter or bicycle. Meanwhile, the three top-selling vehicles in the U.S. in 2018 were pickup trucks. “Americans bought over 17 million vehicles for the fourth year in a row in 2018, and 68% of them were trucks and SUVs, continuing a years-long trend away from cars that’s been driven by increasing choice, low gas prices and improving fuel economy,” says Fox News. Unless you need a big vehicle to generate income, that’s not transportation. Instead, those are luxury items—and they often cost $40,000 and up.
In 2014, there were 48,500 self-storage facilities in the U.S., almost double the number of McDonald’s and Starbucks combined. We’re talking about places to store stuff that’s largely unnecessary or even forgotten about. Keep in mind that this is in addition to basements, attics and garages. One survey showed that roughly a quarter of homeowners can’t use their garage for their car because it’s so cluttered. I’m guessing another hefty percentage simply can’t get that pickup to fit in the garage.
Public policy is set using survey data and lots of assumptions. I have trouble reconciling much of that research with the reality of America’s spending habits. How can you claim to be living paycheck to paycheck, and yet have more stuff than you can store in your house or afford a vehicle way beyond what you need to get from here to there?
And one final cantankerous thought: Wouldn’t our financial future be a tad brighter if, instead of spending $73 billion each year on state lotteries, we invested the money?
Richard Quinn blogs at QuinnsCommentary.com. Before retiring in 2010, Dick was a compensation and benefits executive. His previous articles include Shortsighted, Farewell Money and One Last Thing. Follow Dick on Twitter @QuinnsComments.
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Statistics can be very misleading. The top 5% say, could own the
lion’s share of toys, shoes, jewelry and watches. Thus, if you
looked at the overwhelming majority of Americans they might line
up roughly equal to the rest of the world.
BecomingMinimalist.com actually said:
“The average size of the American home has nearly tripled in size”
“Average” is one of those words that should set off alarm bells.
It can all too easily distort. A common method to calculate an
“average” house size is is to add up all square feet, then divide
by the # of houses.
So if a community had 1 house of 100,000 sq. feet, and 100 of
1,000 sq. feet, the average house size would be almost 2,000
square feet. Yet if you looked at the average family, they would
live in a 1,000 sq. foot house.
While I suspect that “average” house size is not a skewed as
“average” pay or wealth, “average” can easily delude and should
really be banned from the English language.
As far as house sizes go, where I live home builders simply do
not build smaller houses. It is too lucrative to build larger houses.
So someone wanting a house has to wait for a older, smaller
house in their area. Which may never happen. Or buy a
newer, larger house, even if they don’t want the size.
The most annoying thing to me about all personal finance writing
is it is exclusively personal. Yet public policy changes may be
a better way to make people happier in their financial lives.
Facts don’t have feelings…And it offends those who choose not to believe it.
Almost everything in life comes down to choices. Most people I’ve met who are in floundering careers, hopeless financial situations and dysfunctional lives are simply flying without a plan. If you don’t have a plan, the world will provide one for you and you live with that choice and those outcomes.
Buy a new car, you choose to pay for something going down in value instead of a good investment. Pay rent for decades, you choose to forfeit equity building. Buy shiny objects, you pass up the opportunity to build wealth.
By the way, how much do tattoos cost? Asking for a friend.
“Bart, just to help your friend out:
The best tattoo I ever got was a picture of Popeye, the Sailor Man,
with the word ‘Muther’ inked across his forearm so that it danced
whenever I sneezed. It cost me a lot. $250. But then I was able to sell it on
the open market just two months later for $2,500. That’s an annualized
return of 1,200%!!! The only thing was, the customer paid me in clams, and
I’m allergic to seafood. What are you gonna do?”
(($; -)}™
Well done Sir!
How come when I watch these home real estate shows everybody wants a bathroom for each bedroom plus an extra one? My mom who grew up only 6.5 miles from Philadelphia, PA in New Jersey, grew up in luxury. They had a two seater outhouse (wood not brick). They did not get indoor sewer until the mid 1950’s. So anybody who has more than one bathroom and is living paycheck to paycheck, it is their choice in being house poor. Our family of 5 grew up just fine with one indoor bathroom during the 1960s & 70s.
Richard: I just happened across this site today and it is refreshing to read! My late parents were young adults during the Depression and lived very frugally, and a lot of it rubbed off on me. I’m almost 69, self-employed, still working — although I have a (self-directed, self-taught) portfolio, treading water, waiting for me to draw on, that is about twice as large as need be. Unfortunately, I’ll probably end up being the richest guy in the graveyard.
I’ve been laughing for years at the silliness of Americas who cry that they can’t afford this or that. But they have enough money to buy bottled water that costs more than gasoline — all the while having probably the world’s cleanest tap water. I read somewhere that around half (?) of the world’s population doesn’t have access to potable water — much less having it inside their homes in several places, hot or cold.
About 15 years ago I dated a woman who was on “public assistance,” lived in a brand new $900/month townhouse, had cable TV, high speed I-net, kids had cell phones, and she was going to college to become a medical coder — she lived better than I do, or ever did. All courtesy of us taxpayers, of course. There seems to be something wrong with this picture.
Oh well it’s endless, but I’ll stop here. But I will be visiting this site regularly!