Two of my favorite thinkers got together last week and had a conversation and, no, I’m not talking about Chuck Marohn interviewing me on his podcast. Chris Martensen and John Michael Greer had a great dialog on the Peak Prosperity podcast and I enjoyed it thoroughly. There were two points which were made however, which, while I wouldn’t say that I disagree, I would say that I have a different perspective.
At one point in the interview John says that one of the great changes since the 70’s is that, back then, a family could live on one income and have enough to own a house, one car, and go on a vacation once in a while. It is impossible to argue that real wages haven’t stagnated or declined for most Americans over the last 40 years, or that for most that has meant that either becoming a two income family, or living more frugally has been a necessity. What I would like to argue, because I’ve lived it, is that for much of that time it has been possible, even in a part of the country known for having a high cost of living, to live just as John Michael Greer describes with the house, the car, and the occasional vacation, if one didn’t flee to the suburbs.
Yes, someone might point out, if everyone else didn’t ditch the city then this would not have been the case for me. Absolutely. But they did, and I want to point out what is and has been possible. My wife and I use a budget. It serves the dual purpose of informing us on how we spend our money and restraining our spending on a monthly basis. I would divide our budget into two parts for purposes of this post: needs, and wants.
“Needs” include our mortgage payment, property taxes, and insurance on our home; utilities like natural gas, electric, and telephone; groceries; expenses for one car with gas and insurance; and a small amount for clothing, household items, and life insurance. In our case, my (I’ll admit) no-longer-so-humble teacher’s salary exceeds those expenses by a little more than $1,000 a month. This includes refinancing the house with a 15 year instead of a 30 year mortgage a number of years ago, and finishing out payments on a “late model” used car financed over just a couple of years because, upon getting married my wife and I had two paid for vehicles with a combined 300,000 miles on them which were starting to break down, and we decided that we did need at least one reliable automobile.
How is it that we could live on one income? Our home cost “only” $90,000, our property taxes are only around $200 a month, we can survive very easily with only one car (and we could even with a child of driving age), and vacation for me has never meant a week at Sandals, on a Mediterranean cruise, or spending any money at “The Magic Kingdom”.
Exotic Six Flags New England:
I would posit that a great deal of the difficulty that people have now accessing the “American Dream” is because inflated home prices and their commensurate property taxes, multiple car payments, and ridiculously high expectations relative to “vacations” and leisure, along with the excessive energy expenses that come with huge, far flung homes, and the necessity of using the automobile for even the most mundane of tasks makes it so. I would go so far as to say that right now my family could live on 60% of my current salary alone AND in 10 years perhaps even less than 50%.
Free show at the museum:
Most people don’t want to do what we do, I get that, but if they did then it would cost us more to do it!
Briefly on to my second ever so tiny disagreement with JMG and Chris Martensen. They advise throwing away your TV set, especially if you have children, to protect them from the damage broadcast media can do to them. With all due respect, they also have chosen to more or less run away from society at large. I recommend a different tack: teach your children to be discerning viewers. Yes, I agree that young children should be shielded from advertising, but as they grow older they need to be taught about what advertising is. We are not defenseless against propaganda of any kind be it commercial, social, religious, or political. Explain that products are advertised because you DON’T need them. Explain that everyone expressing an idea comes from some point of view and part of really understanding the message is understanding what the assumptions are.
I have a great, socially significant, important job. I volunteer at LuLu’s school, I’m on the Historical Commission in my hometown, I keep a blog, I spend time with my wife, I read, I garden. And I watch TV: The Daily Show; soccer of various kinds; “the news”; and lately, Game of Thrones(Yup, one of the “wants” is cable TV, “Heaven forfend!”). My wife and I watch a movie (and Netflix) almost every week. Her family has a great history in film making and she is very knowledgable. To not be somewhat conversant regarding cinema in the 21st century would be like being unaware of the novel in the 19th, in my not-so-humble humble opinion.
My wife and I don’t live on just my salary. She works from home and we use her income and the “excess” from my income to invest, to dine out, to buy season tickets to the symphony, to pay for violin lessons and drama classes for LuLu. But those are choices. My wife decided to forego a much more lucrative job in insurance to work from home. We don’t view yearly vacations and travel as necessities: we are saving for a trip to Spain later this year or next. We have decided to look at our income and live within those constraints, and living in a place with low housing costs and no need for a second car makes that easier. My experience is that most people think that they deserve a certain “lifestyle”, pursue it, and then complain if their income is not sufficient to pay for that lifestyle. That, simply put, is backwards.
“I would posit that a great deal of the difficulty that people have now accessing the “American Dream” is because inflated home prices and their commensurate property taxes, multiple car payments, and ridiculously high expectations relative to “vacations” and leisure, along with the excessive energy expenses that come with huge, far flung homes, and the necessity of using the automobile for even the most mundane of tasks makes it so. I would go so far as to say that right now my family could live on 60% of my current salary alone AND in 10 years perhaps even less than 50%.”
Yes, yes, yes, yes, yes, thank you.
I ride my bike everywhere. My wife sold our car 30 years ago, accepting $50 from the man who towed it for us, and we have been without a car ever since. We walk or bike or ride public transit everywhere. I bike in summer and towel off my head when I get to work, I’ve biked in 14 below temperatures. And I don’t bike to be a rolling message, but I bike by default, and others marvel, but never even get to the point of thinking “I wish I could live like that.” Why not?
One winter morning while I was biking toward work in Chicago, a lady in a car rolled down her window, gave me a big smile, and said “you are amazing!” That was nice of her, but she missed the point. I don’t want to be amazing. I want her to get out of her car and bike with me. She can do it. In January. Nobody passed legislation requiring every American household to struggle to keep up with payments on two SUVs. Our expectations for what life is supposed to look like are ridiculous in this country, and also, really, really expensive. We don’t have to live that way. There are alternatives.
My wife and I live on the top floor of a 1914 two-flat, less than 1000 square feet. No car. So we wait for buses sometimes, walk in the rain. My wife and I paid off our mortgage in 7.5 years, and have been debt-free ever since. Our sons have college degrees without borrowing. My wife went back to work full time in the summer of 2013; it was the first time that we were both working full time since July of 1987. We feel wealthy now, and we are, in fact, by any objective measure. But a hearty reason for that wealth comes from avoiding $12,000 a year or more in car payments, insurance, and maintenance.
I loved your podcast with Chuck. I am living your experience in DC, except it is super expensive to live in a beautiful historic neighborhood with “bad” schools. So it takes 2+ salaries to make it work, especially for those that are transporting those kids across towns to avoid the “horrible” schools, which means the schools with poor kids. The schools are actually incredible and my kids are doing much better than their suburban counterparts at the “good” schools. And we walk to the school together every morning, holding hands.