In my previous post, I had written that my main interest when I travel is to see how people live in other countries and how that differs with our lifestyle here in America. Looking at what people buy, what they eat, how they dress and what they spend on generally gives me a good idea of what their lives are like. After I wrote the post it occurred to me that I can’t make such assessments about my fellow Americans.
According to U.S government statistics, the median per capita income in 2013 was only $ 28,184 ( down from$ 29,984 in 2007) and the median family income in 2013 was $ 64,,030 ( down from $ 68,727 in 2007). This suggests that most families are two( or more) income families. These are not huge numbers and (because of the downward trend) families must be under great financial strain. I cannot tell that from what I see around me.
At the supermarket, the person ahead of me in the checkout line has a full shopping cart, with plenty of meat and other pricey items. The cars I see on the road are mostly late year models, with a surprising number of SUVs and luxury makes like Audis, BMWs and Benzs. Chain restaurants aren’t doing too badly though I do note that they have scaled down their prices and frequently offer specials. Department stores are certainly not crowded but, I think, that is because more people prefer to shop online. And when it comes to discretionary spending, people are still quite free with their money. I remember being flabbergasted by what I saw on a an Alaska cruise four years ago. On these cruises, passengers are forbidden to bring their own liquor and beer and must buy drinks on board at exorbitant prices; only soft drinks are ” free”. My fellow passengers, the majority of them working stiffs and their families like us, spent with abandon knocking back drinks and shopping avidly for souvenirs and other crap. I have noticed similar spending behavior at Disney World, Great Adventure and other attractions. There is no way it’s possible on a family income of $ 64,000, or even $ 70,000 or $ 75,000. How can they afford it?
It’s possible that, since I live in a New Jersey suburb, the people I run across are not a representative of the average American. I also understand that money goes further in rural areas and in states in the South and Mid-West. But that doesn’t explain all of it.
Looking at the statistics on household debt and retirement savings it is painfully obvious that too many of us are living beyond our means. According to Bloomberg News, average household debt in 2010 was $ 74,619 and households where the main wage earner was between 35 and 44 years old owed an average of $ 128,500. Meanwhile, according to other sources, the average retirement savings in 2012 was only $ 72,800 and almost 1/2 of all Americans were dying with less than $ 10,000 to their names. Sadly, many Americans list Social Security as their main source of income in their retirement years.
The one note of cheer is the behavior of the millenials ( those born between 1978and 1996, who are now in the age bracket 18-34). These youngsters, who are generally better educated and more savvy about their finances, are a generation of supersavers. A majority of them report being either ” very confident” or ” somewhat confident” that they will be able to save enough for a comfortable retirement. Thanks to them, the overall numbers show a modest improvement.