That same salary today would be renting and would certainly not support 3 kids. They had it better by a country mile, if they opened a saving account they would “only” get about 7 percent interest. If I open one now I get .3 percent. Used tires? That’s so tragic.
Seriously though everyone’s wants to play struggle olympics. People could afford homes and children on two sometimes one income and now my partner and I make over 100k a year after tax and we have almost no hope of buying a home. Spoiled generation
Entirely depends where. The cheapest home with half of an hour of me that doesn't require a teardown is $250k, for a 2 bed 1 bath. This is not a particularly high CoL area, and even with a 20% down payment you'd need to be making 80k to afford the mortgage+taxes+insurance.
I bought my place for $210k making 50k per year and I used the first time home buyer option so only needed 8k down. My mortgage was $1569 including taxes, mortgage insurance, and home insurance. I've had no problem at all making payments. Obviously, it wasn't ideal spending 35% of my income on my mortgage and I had to cut back on spending, but that's always been the reality of home ownership, and I certainly wasn't struggling. I make more money now, I was able to refinance to get the mortgage insurance off, and while rent continues going higher, my mortgage has gotten lower. So, the sacrifice was more than worth it. Now that I have equity, I can use that to get into a nicer home if I want. This has always been the way it works.
Yes, homes were more affordable in the past, but the interest rates were insane and you had to save up that 20%. It's not as big of a crisis as reddit will have you believe. The reason housing is up so much is because the homes in desirable areas have skyrocketed. The population continues to climb and there's no more room to build. There's still plenty of affordable housing in outer ring suburbs, people just think they deserve a penthouse in the cities and jobs starting at 100k per year straight out of college.
Was that 50k a year before or after taxes? What year did you buy this house? Did you have kids? Did you have savings? Do you live in an area that doesn't have a ton of competition for those houses on the market? Did you ever have any threat of medical issues costing you thousands and taking out your savings and ability to make payments?
Do you really think there is no room in America to build houses? Is that an honest to God thought that you have?
There's plenty of room to build houses, just far less than there used to be in desirable areas. That's why the highest cost of living areas have exploded in value, on top of many people locking in to super low interest rates during the pandemic. It's called supply and demand. If you actually went to college and paid attention in your economics 1101 class, this concept wouldn't be lost on you. It was $48k salary before taxes on 2016. Yes, I have kids. I had a major surgery in 2015, my insurance covered 80%, my HSA covered the rest. I had 8k, my down-payment. I live in an outer ring suburb and commute 35-45 minutes (at night, it would easily be an hour of I worked 9-5) to downtown for work. My house is now worth about 300k. Easily affordable on my salary and the person i responded to. In fact, they could afford a much, much nicer house than me.
Lol not sure what you tried to send me, but it was immediately removed. I'm guessing you said something you shouldn't have? Anyway, your first half of the message was there and it was accusing me of struggling on my 48k income before taxes with my $1600 mortgage. I did not struggle in the slightest. I grew up poor af bro. My grocery bill is about $100 a week, even with inflation. I meal prep. I save. I am still wearing clothes I bought before I bought my house. Not everyone needs the newest iPhone, camry, or Jordan's to be happy. I'm sorry that you don't know how to use this economy to your advantage, but I promise you that it's 100% your fault, not societies. Good luck with your victim complex and bad attitude though, I'm sure it serves you well!
Was that 50k a year before or after taxes? What year did you buy this house? Did you have kids? Did you have savings? Do you live in an area that doesn't have a ton of competition for those houses on the market? Did you ever have any threat of medical issues costing you thousands and taking out your savings and ability to make payments?
Do you really think there is no room in America to build houses? Is that an honest to God thought that you have?
Don't know why you couldn't see this but it didn't get remove, sorry to disappoint you, common reddit bug.
You didn't have kids in that house with those payments. I grew up poor too kid, I don't spend money on anything unnecessary, but you are just a goofball
I mean, that's a 2 bedroom home in an outer ring suburb. Property taxes are high here, so that drives up the cost more.
So a higher amount financed, higher property taxes, and probably higher interest than when you bought, which requires a higher income. $80k would make that house borderline unaffordable here, which basically means that the median household income can barely afford the cheapest house available.
I also don't disagree that if you can get into a house it can be a great deal, but trying to highlight how that that's increasingly difficult.
Y'all need to stop spouting this misinformation that 20% is what most people do. A two second Google search will tell you less than half of people who buy a home put down 20% the majority are putting down less. I’ve bought 4 houses over my life and I’ve never put down 20%. Reddit thinks 20% is required. It’s not. It’s what you need to avoid the PMI penalty, but the PMI isn’t often that much. On one of my homes it was like $50 a month.
Lol. That's not a starter home. Maybe if you live in San Diego or something. Even then, there's rural areas you can move to. If I transfered to San Diego and kept my current position, id be making 50-75% more money too. So, if you're making 100k combined, you must be in extremely low level positions. If you're both making 100k, you can easily afford a 500k home. Honestly, it's doable (though, not ideal) on 100k total. That's only 20% of your income. You'd be looking at a 3kish payment. Probably about what you're paying in rent if you live out there anyway.
Your not trying, there's ways and most of these generations, simply don't try or even care to listen the advice they're given, a few listen and achieve the goals of buying a home! I've given up trying to help people understand this...
Hourly wages in early 1980s were around $7 per hour, while the minimum wage was $3.10 per hour. I remember making the minimum wage in 1980, and the company thought they did something when they gave me a $.25 per hour raise. Savings account interest rates were higher because interest rates to borrow money was higher, up to 19 percent for a used car loan. Morgage rates were as high as 16 percent in the early 1980s. When all your money went to survive, and you needed to drive every day to work, buying used tires was the only way to go. I lived through it. Did we have it better then? Doubtful. No AC in the house because the electric bill was so expensive; no vacations, other than riding up the road to Atlanta to Six Flags once. Three channels on a 19 inch TV. One phone on the wall. Fast food was a luxury, not an everyday meal.
I mean, that $0.25/h raise was an 8% raise. When I was working minimum about 10 years ago, a 25 cent raise was reserved for only the favorites and was only a 3.4% raise. Not even keeping up with average inflation. Most of my coworkers got 5-10 cents most years.
Minimum wage now is irrelevant,as it probably was back in the 1980s. Only about 1 percent of U.S. workers get federal minimum; if you still work for a job that only pays you minimum, walk across the street to McDonalds and double your salary. The market and states have stepped in to raise it.
Fuck Boomers. You were born into the single greatest period of prosperity of any generation of any country in the history of the world and spent your entire adult lives pulling up the ladder on everyone who came after you. This revisionist “we are frugal” fantasy is laughable. Your prosperity came from offshoring the great job you enjoyed, killing the great pension you enjoyed and padding your stock portfolio with all the profits you gained from selling out future generations. All while putting the costs of living beyond your means on the national debt that, surprise, you knew you wouldn’t be around to have to pay off.
Well I can tell you that as a kid I had a savings account that got ~3.5% interest when the prime lending rate was around 11%. Today I have one that pays about ~3.5% when the prime lending rate is ~7%.
Mostly the economy is at least as good/bad today as it was then. The main thing that is fucked is housing and cars. Both are fucked for the same reason which comes down to government policy. Primarily with keeping interest rates at 0% or close enough to it for so long. Secondarily via regulatory requirements.
No. "housing is fucked" in terms of housing prices collapsing would mean the economy is fucked. What we have isn't going to suddenly put downward pressure on the economy unless we suddenly get a surplus of housing or the people needing it suddenly go somewhere.
Which is what makes the problem extra pernicious. What could be fixed with policy won't be because nobody wants to be in charge for the contraction in the economy you'd get from making the housing situation better. Kind of like how you are never going to see healthcare improve. I mean shit.. you reign in healthcare costs by 7% and you have pretty much created an ongoing recession that will likely last long enough to be a depression. Do you know what that would do to <fill in career politician's name here> legacy/chance for reelection?
I honestly appreciate these perspectives. Those are huge issues to me but I agree with what you’re saying. It sucks that it’s the 2 things that are basically necessary for life.
The car stuff is fixable. Just odds are some more people will die each year to fix it.
The housing stuff is a bigger problem because one of the things the interest rates did was make a lot more places built out, which fundamentally reduces your policy options going forward. It sounds bad even to me, but I'm really thinking we need to bring back company towns for a bit and to get employers to move to places building more housing is viable instead of just bidding up heavily populated places.
Really? A google search tells me that in 1990 the average savings account had between 8-9 percent interest. In 1981 that number was 14 percent. I’m sorry you picked the wrong account. If you’re in your forties how the fuck did you have an account in the late 80s? You would be like 14 tops
Your google search is wrong and turned up a bad result, or you misinterpreted. HYSAs have only existed for 20 years, so I know it’s not that. In the mid, late 70s I got my first savings account as a little kid, and the rate was 5 1/4%. My dad later found that S&Ls were paying 5 3/4%, so we moved my account. I’ve had a savings account at various banks since then, and those rates were the best they ever were.
I think you’re talking about CDs and t-bills, which is not an average savings account.
Ok but 5.5 percent would be fantastic compared to .3 percent. You guys aren’t making the compelling argument you think you’re making. But I’ll concede that I could have gotten the wrong info
Its true saving accounts got up to 7% in the 80s, but you're missing the part where inflation was 14%. A HYSA account today will actually beat inflation, those savings accounts did not.
They aren’t announcing it but the real inflation we are experiencing right now is way over 14 percent. Groceries cost more than 40 percent more than they did 2 years ago, my insurance went up by 150 a month. If you think .3 percent covers anything Youre insane.
I'm guessing since you had to Google the information, you aren't old enough to understand.
I respect that Google is a source for you and it can be helpful. There are gaps though.
Case in point, you sarcastically asking how they got an account was some nuance that your Google search didn't provide you with.
It was FAR COMMON to give a child a bank account even earlier than the aforementioned 14 years old this person seems to be.
Even if they were in their late 40s, 48 is the number I used, that would make them born in 1978.
They'd be 3.
An adult got them that account and you'd be surprised to learn, again since you are Googling so you probably weren't alive then, that a NON parent might have gotten them that account. Like an aunt.
An uncle. A grandparent. It was pretty common. Now, we don't do that. We do other things.
Like I've done for my granddaughters. @ investments and such. We might get them an account 'for fun' so they can see the difference between slow growth and rapid growth but we have access to more tools.
Hell, it wasn't until 1974 ECOA was passed.
What the hell does that have to do with what you are talking about?
Everyone didn't have the VERY clear and insightful knowledge that you CLEARLY possess now because they likely couldn't open a savings/checking account to begin with. I say that because you were pretty glib here... >> I’m sorry you picked the wrong account.
They hadn't had much practice at it, the full scope nor the benefit of HINDSIGHT like you have here.
So excuse them for not picking a HIGH YIELD ACCOUNT, which is the number you cited BY THE WAY.
They picked a regular savings account because they were happy to be able to do just that or they just flat out didn't know better.
I know this because in 1981 REGULAR ACCOUNTS WERE CAPPED AT around 5.5% max. Picking a year inflation was high (and the reason why rates were that high) is pretty a take for sure on your part for the record. Yes, the yielded more return but their actual spending power went down a LOT.
This is my problem with 'quick Google searches'. Especially if you aren't going to give Google a lot to work with as far as the surrounding issues that effect the numbers you are seeking to prove your points.
They miss a lot of context. Important context.
You still probably feel how you feel too which is fine btw but I just couldn't read this without adding context because context matters.
You working with children and being (rightfully) empathetic to context as it relates to them I'm sure you agree that's fair no?
You seem well versed in context and detail but it's not happening here. I suspect because you (or those around you) are feeling the brunt and the blame has to go somewhere.
ARE THINGS HORRIBLE NOW?
Yup.
Nothing I said changes WHAT IS HAPPENING NOW.
We just don't have to lie (even by omission) about the past though is all I'm saying to get into a grief Olympics over the issue.
My (grown) kids live with me and their only hope of a house is if I sell them mine.
Which is what I'm going to do.
I'll take the loss because it's a gain for my personal well being.
I do not disagree with it being bad now. At all. I live it every day as a widowed Father of 3 helping all of my daughters in some way.
We all can't do that though.
Just can't be done.
Same way we all weren't left a pot of gold nor was I expecting that from someone who came from one of 19 brothers and sisters. lol
They said “I got an account” and now Youre acting like I misunderstood. 5.5 percent would be a godsend so idk what you’re on about, if that’s the average thats fucking amazing. You literally went through my history to write this essay lol. And then in the end you agree with me that things are terrible now and that if you didn’t generously give Your children would be completely screwed. My original context was speaking to my father as he described his experience of getting a savings account in the early 90’s and I used google to check my facts.
I used your history because it was there AND I wanted to make sure you knew I didn't think you were dumb honestly EVEN THOUGH you responded sarcastically to the person in question.
That's why I cited it.
The information is there. I personally drill down information so I used what was available. It took 2 seconds and my 'essay' wasn't about your character in the end. It was about what you wrote on the topic. I type 110 wpm minute, this is FAR FROM AN ESSAY for me.
You couldn't deduce, after figuring out their age, they didn't actually set up the account fam? Come on now.
Really?
A google search tells me that in 1990 the average savings account had between 8-9 percent interest. In 1981 that number was 14 percent. I’m sorry you picked the wrong account.
This is you saying it 5.5% is a godsend where?? Telling them you are sorry that they picked the wrong account after saying 'Really?"
I addressed why they might have 'picked the wrong' account. @ what I was on about.
Your comment is EDITED so what did you originally say? I ask because reading your comment on it's face when compared to their original comment doesn't sound like a complimentary comment AT ALL in it's current form.
I added to my comment in the edit lol I didn’t remove anything. Are you a publisher come to review my comments? The 5.5 percent comes from your comment, which is a godsend because I don’t have access to that kind of rate. They had it better and you have not convinced me otherwise.
My only point was to say that those accounts didn't outperform the rate of the goods and services at the time.
We make the same legit argument for the things now when that happens and we are correct.
You want to think they had it better because a number was higher even though it was still under the inflation rates because it was the past, have at it.
I think life was better because I don’t know more than 3 people under 40 who can own a home and have children. I think life was better because a trip to the grocery store makes me want to cry, and every day it gets worse.
I do, only because the bank made this big thing about the power of saving and compound interest, and I asked my parents about it, and was told about how that was all true, but at that interest rate it would take like 10 million years for it to really do anything. The contradiction of their gushing brochure and reality has stuck with me.
I had that account until the bank got bought out about 10 years later and the new bank wanted to charge me every month for the privilege of having a small balance savings account with no checking account or regular deposits.
If your using US Bank or Wells Fargo to store your cash, sure. Theres plenty of high yield savings accounts available that get you 3-5 percent and offer full online banking so location is irrelevant. Either way if your saving long term it should be in an IRA or 401k invested in index funds for a healthy 7-15 percent depending on the year.
Thats...not true? I know a couple police officers who raise 2 kids just fine. They are not scraping by and id put money down they could add a 3rd just fine. Those kids get spoiled lol.
Also there are high yield accounts that get 4%. Look into them.
Median home price was 47k it’s now 460k. I’ll take high interest any day. I don’t have to do the math to tell you that we are putting way more money toward the interest than they were in 1980. 400 bucks a month (14 percent, 30 yr 47k house in 1980 with only 10 percent down payment) is 1500 after inflation adjustment. Today a 300k home (160k below median price mind you, with a 20 percent down payment) is gonna run over 2500-3k despite lower interest. I used very conservative numbers to get this and it is heavily weighed in the favor of your 1980s example (lower down payment, expensive house, highest interest rate recorded vs my modern example with 20 percent down, way below median value and a low interest rate)
Median home price was absolutely not 47k, by the early 80s it was around 70k. And today its closer to 420. And also, comparing the average purchased middle class home in the 1980s to today isnt exactly apples to apples. Typical homes were 500-700 sqft smaller, maybe a single car detached garage, central air was a luxury, garbage tiny kitchens, and averaged 1 few bedroom and bathroom.
And that cop's salary was probably like 20k tops. His take home 1600 a month? The difference in interest from 5% to 12.5% is almost 300 month.
And maybe Im misundetstsnding what you are saying, are you saying a mortgage payment today on 300k is between 2500 and 3000?
Im not saying things weren't better in years past, but lets not pretend like they were just giving out homes like candy.
You’re right it was 64k median (stupid AI answers). But my math dramatically favored the 80s home and I picked a modest home far under median price for the modern one. So let’s see 80s home is now 504 a month which is 1909 adjusted for inflation. It’s closer than I thought so I have to give you credit. But let’s be real I’m using 1981 interest and it’s still less expensive. In 1980 the rate was 8 percent not 14. if I compare modern prices with 1990, 1980 or early 2000s it’ll be more drastic than picking the highest period of mortgage interest rates in recent history. I was just making a point and I don’t feel like doing more math.
Thank you for telling me you dont want to do more math. I dont want to either. Are things tougher now? Yes, without a doubt. I think it gets a bit exaggerated though.
7% interest is 23.333 times as much interest as .3 interest. Inflation being 10% is only 2.5 times the inflation we have today. This doesn't prove the point you think you are making.
Awww did I hurt your feelings by having a different opinion? Or was it that people liked my opinion more? I know it’s hard being such a snowflake so I forgive you for being rude!
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u/hollowsoldier- 17h ago
That same salary today would be renting and would certainly not support 3 kids. They had it better by a country mile, if they opened a saving account they would “only” get about 7 percent interest. If I open one now I get .3 percent. Used tires? That’s so tragic.