Looking Back 50 Years To Solve Money Problems

When it comes to financial problems, often there is little resolved from looking back. Changing your ways in the present and planning for the future seem to be where our time and attention is best spent. That being said, reflection can always be useful and gives us some insight into how to handle our current plight. Times are changing…and they have changed quite a bit in the last 70 years. Here are some things to consider when comparing our everyday money problems to those of yesteryear.

1. Looking Back – Cash Was King

Budget, budget, budget! Our budgets were practically automatic back then. All you and your family had for a month or a pay period was the amount of cash you had in your pocket. This forced every family to think through the month and prioritize their spending. I am sure it wasn’t always rainbows, but on the other hand, you could keep yourself out of or away from trouble because all you had was cash. Which brings me to my second point…

2. Looking Back – Credit Was Not A Way Of Life

There was no “emergency” cash advance. It also wasn’t common to carry a wallet full of credit cards. The “pay day” loans we have these days did not exist. Most people only borrowed money for a home. Even cars were paid in cash. This path may have required more hard work, but you didn’t have to dig your way out of something for years to come!

3. Looking Back – Pensions Were Common

Where as we now rely on our ability to save or stock away money in a Roth or 401k, most workers used to rely on pensions. The 20-40 years a person spent working didn’t require a solid 10-20% of their take-home pay to be put away for retirement.

4. Looking Back – Cost Of Living vs. Compensation

It is safe to say that when you review statistics from the 50’s, the cost of living, the price of a home and the amount someone was paid – was a more favorable ratio than today. While compensation has gone up considerably in the last 60 years, the price of homes and expenses has accelerated at a faster pace. Which brings me to my last point…

5. Looking Back – Insurance Was A Different Game

There are several costly insurances it is important to have nowadays. This includes home, health, auto, life, disability and more! The rise of fraud, crime, depleting health, rising costs and the disintegration of generational living has led us to a life where our insurance, regardless of cost, has become king. This was not the way it used to be.

What can you do? Make the best of it and plan well. We aren’t the era we are born into. Take your financial health into your own hands and talk to your accountant for good and practical advice for all of your financial conundrums.