Tuesday, October 13, 2009

13 October 1955 “Thrift and Budgets and Free Entertainment, Oh My!”

First, let me say that I think starting next Monday might be good for our VICTORY WEEK. If others have already started, great, let’s hear your results. I think there was some confusion about when to begin and I now have an out of town guest, so would rather focus on it next week, I hope this is alright with everyone.
schoolroom Now, kids, settle into your desks and no talking or note passing, it’s educational film time. So, take notes there WILL be a quiz afterwards!
I thought it important that we watch this little film on thrift.

First off, there is a lot in this little film. I like how right off the bat this movie has our modern world down pat:  Jack (the kid in the argyle sweater) orders the biggest fanciest thing on the menu, and I couldn’t help but think of Starbucks or any chain restaurant like Chili’s etc.
Next, we see the following budget illustrated for the family. It does not show what they earn, but I found out that an average American middle class family in 1948 earned around $3,058  which is around 25,000 in modern money.  (that is according to an historical census bureau report for Median income of that year for a family with a non working wife.) When I add up this family’s  itemized budget (and we assume this allocating ALL of this family’s weekly amounts in the budget) that  this family is earning around 3,848.00 a year, so they are right in the middle and equivalent to today’s earnings of 35,000.  So really, that is an average lower-middle class income today as well, so to see what they allocate a week  SHOULD be comparable to today.
Food                                                        18.00
Household                                            20.00
Clothing                                                    8.00
Recreation                                               3.00
Family Welfare                                       5.00
Transportation                                       4.00
Benevolences                                          3.00
Savings                                                       5.00
     Father                                                      3.00
     Mother                                                     3.00
      Jack                                                          2.00

So translated for today, a family earning 35,000 a year should be able to use the following budget.
Food                                                         160.00
Household                                              180.00
Clothing                                                     70.00
Recreation                                                25.00
Family Welfare                                        45.00
Transportation                                        36.00
Benevolences                                           25.00
Savings                                                        45.00
     Father                                                     28.00
     Mother                                                    28.oo
     Jack                                                          18.00
So, now with my inflation calculator I can translate this into today’s dollars and we can compare with our own budgets. Some of the numbers surprised me, but then I began to look at taxation in 1948 compared to today. It was rather interesting. Again, me a simple little homemaker who has to use a budget begins to wonder, where DOES all of our money go? I think once  such women would be involved in local government in hosting campaign meetings and having their voice heard for local and national politics.
I found this information concerning taxation in 1948 compared to today (2009) rather interesting.
In 1948 the average family of four sent just two cents of every dollar they earned to the federal government for taxes. Today a family of four sends Uncle Sam 25 cents out of every dollar earned. But that’s not where the tax bite stops. State and local taxes, sales tax, value added taxes, utility taxes, gasoline taxes, medical taxes and deductions, property taxes, telephone taxes—the list goes on and on.
The average worker in this country works until May 6 each year to pay off his federal tax, until May 23 to pay the taxes levied by Congress, and until July 3 to pay all federal, state, and local taxes. This means the average wage earner works more than six months of every year for the government before he can keep the first nickel of his personal income for his own use.
Of a family meal at a local restaurant that costs you $40, fully $11 of the tab goes for taxes of some kind. Federal tax, payroll tax, state tax, sales and use tax, unemployment insurance tax, property tax, business license tax and fees, telephone, utility, liquor and excise taxes, and more. But if the impact of so much taxation is hard on local businesses, it’s even harder on the families paying the bills.
In 1948 the $600 per child tax credit was equal to 42 percent of the average wage-earner’s per capita income. If that exemption had been adjusted for the rise in income over the years, it would now be worth more than $9,000 per child (42 percent of average per capita income). But the deduction, as a percentage of per capita income, has dropped precipitously from 42 percent in 1948 to less than 12 percent today.

Now, in the film we see Jack’s  ‘entertainment’ budget would be equal to today’s money $8.00. A child could not even see a movie for $8.00 today, which is ridiculous. It makes me want to say to big American films:” Yes, please spend millions on special affects and overpaid actors so we can use up our small money to watch you do it for two hours in a dark movie theatre! “
When I see these things I realize we can’t just say, “Oh, things were cheaper back then”, because they all were not. And when they were cheaper it was because what was charged is realistic to what you get. The expectation was equal to the cost. Today, we think nothing of plunking down 20.00 at a movie for ourselves. Think about it: even if you earn above my states min wage (which is currently 8.25 an hour I believe) say you earn 9.00 an hour.  You would have had to work your job for over two hours just to sit and be entertained and eat overpriced food in the dark for two hours. Is it a fair trade? Does the relaxation of such an endeavor make up for what you could have saved and possibly not had to work as much the following year?
This point is really driven home when next in this film we see Jack notice an advert for a local dance at the cost of $1.00. He realizes that is exactly his weeks entertainment budget, but he also wants to see a movie. So, he has to DECIDE which to choose. Today we would say, “Oh, go do both, you DESERVE it, you need a break, a chance to unwind after all your hard work”. That seems to be the biggest lure to our current spending habits. The idea that we DESERVE something when we can’t have it. What  this really means is we simply spend what we don’t have to feed a growing economy that doesn’t care about us, but the money in our pocket, so they trick us into thinking how much we DESERVE to spend our money on their entertainment, items, food, etc. And with credit cards and even Debit cards, its easy to overspend! Banks also want you to do overspend, because they make most of their money from fees.
Such a simple act as saying, “I have this much, so maybe choose one thing and save the rest” is not that grand of a concept, but boy do we not seem to get that as a nation! Even our own countries budget is an example of this type of living.
When the voice over in the movie exclaims, “Well, you can’t have everything you want” I almost laughed. So much of today’s advertising is about, “Having it all”. Even the lure of the big box stores is that you DESERVE to have it all, so buy it here, it’s cheaper. How about not buying it unless you need it or really want it.
I think we have become a nation of people who don’t even KNOW what we want anymore. We are so defined by our spending that we just think it is a normal part of the function of our day, like breathing and eating, we must shop. The joke saying that has been on everything from t-shirts to bumper stickers “I shop therefore I am” is so on point; so succinct to today’s culture.
When next in the film, Jack’s pen breaks he realizes he can just fix it and make do; there is another lost concept.  “Why bother,” says modern man, “ I’ll just go buy some new things, they are so cheap, right”? But, even if something is really cheap at Wal-Mart not buying it is still saving more than buying a replacement for it. Also, if it weren’t so cheaply made in the first place to make it so cheap, it would probably last longer!
When the narrator says, “Buying Cheap unsatisfactory products is NEVER thrifty” I had to laugh. Wow! That would never be said today. The very base of the big box stores is make it cheap so you can sell it cheap and it will break and you have to buy it more. I actually found out that at Home Depot they have the big name Tool manufacturers make a cheaper version of their tools so they can undersell the local hardware stores. The only thing, of course, is it will break faster than the local one made of better products, say metal where they would use plastic, and it would be easier to repair than the cheap one as well.
The more I realize how many layers of our current society is just built around the inability to not over spend or make a budget, the more I am baffled, especially when you see the answer is SO SIMPLE.
So simple, but we have been programmed, trained for many generations now that we must HAVE things to be happy. Our very self worth is tied up in our clothes and shoes and handbags, our cars and new TVs and computers and games and entertainment. But, the very root of it all, it seems to me we are really unhappy.  I know my 2008 self was COMPLETELY defined by my shopping and things. Was I happy? NO, and then when I began to do what we considered silly outdated degraded chores, I suddenly began to feel self-worth and happiness. I wonder why? Could it be that THINGS don’t make you happy? But, no one says it. Everything seems to be made to be more complicated than it actually is so we can’t just figure it our for ourselves. WE need more drugs to make us happy and more things! It’s too hard to just economize and save!
But, is it? Can’t we do without some things so when we do give ourselves the treat, like Jack and the ‘big game tickets’, it feels more special and fun?!
woman at desk So, what can we do? I mean how do we stop it? I guess really, we just have to take our individual personal responsibilities to heart and look at our spending and our happiness ratio. I know we are just a small band of Apron Revolutionaries, but I think if we start in our own backyards, in our own personal budgets and work out, maybe we can make a difference.
So, how do your own family budgets compare? I am going to go over mine again and see. According to this, if you were a 35,000 a year family now you would be saving $180.00 a month from your paycheck and your HOUSEHOLD (which I am assuming is your mortgage, electric, phone etc) would only be $720.0 a month! Consider that with today’s over inflated real estate prices  in addition to the cable bill and the internet bill etc. plus the higher percentage of taxes paid out, it is a wonder that we can survive. Yet, what do we all do? SPEND.
I mean, when you look at these budgets we should have very little to spend on, yet we have new TVs and computers and phones multiple times a year! We spend on cars what a home would have cost. But, having never really been taught to LOOK at the budget and to SAVE, we just buy into it and end up in debt and then we need to save pennies after all our luxury goods so we go back to the big box stores and feed right back into the very problem we have made for ourselves. We don’t need a place to buy a flat screen TV for LESS we just don’t NEED to buy a flat screen tv or a new car until the SAVINGS comes first! I can’t tell you how eye opening this little movie was for me.
So, we may not be able to affect the insane amount of tax we currently pay (which I would not even be angry about if it were allocated for the benefit of all Americans, like Healthcare and education instead of an insane welfare system that only keeps people in the system) but we can affect our own spending. I am going to sit down and go over my budget again and get it right down to the penny. Then, it will actually be EASY. I will know I can only spend an exact amount each week for my entertainment and if something comes up, then I will decide what is more important that week, a little less savings or the item or show or maybe, I could find a cheaper or free form of entertainment. So much of our modern entertainment costs money. What entertainment could we think of this week that is low or now cost? Cards, Sewing/knitting bee, coffee and sweets at home instead of Starbucks with friends? Let’s hear it ladies, free entertainment ideas and I want to know how this 1948 budget fits with your own families? Let’s talk about this, I am curious about budgets and spending and modern entertainment money being spent.
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