how we dressed, lived and ate back in 1948–lesson 5a

I think I am finally getting over the crud.  I am sleeping all night and coughing less and less.  Yes!  I am left feeling a little beat up and slightly depressed.  I think the depression has more to do with the weather and less with my health.  I am longing for warmth and sunshine.

Back to class, dear readers.  We are now entering the Unit entitled “WISE BUDGETING AND BUYING”.  I think this is going to be a very interesting study to see how things have, or maybe have not, changed since 1948 in the areas of money management and spending.  Our first lesson is called:

Planned Spending of Money and Time

The Matter of Allowances”

Ms. Greer opens the chapter illustrating the importance of young people having an allowance and learning to be accountable for their spending.  This isn’t outlined as giving a child a wad of cash and letting her do with it as she wishes.  Rather, the child/young person would learn responsibility with the money using it for some fun yes, but also maybe school lunches, school supplies, gifts, savings, etc.  She even provides a “budget” as an example.  The allowance is $3.00 but is used for the following:  Streetcar tickets $.30; 5 lunches @ $.30ea = $1.50; 2 pencils $.05; Tablet $.05; School party $.10; lingerie ribbon $.30 (uh, what would this be?); Movie $.30; Sunday school $.10; Savings $.10.  When added up it uses the entire $3.00 and the young financier is ready for her next $3.00. 

I  did some quick calculations (and research).  At www.ssa.gov, I found a table that showed the median incomes in the USA from 1951 until 2009.  Based on that information, I figured out that $3.00 a week represented roughly 5.5% of a family’s income.  The equivalent today would be about $43.00 a week allowance for a young person.  Steep?  At first glance I would say yes.  But the more I thought about it I realized maybe it would not even cover everything.  Kids always have their hands out for some sort of “donation”.  But if a parent (using this scenario and figures) gave her child $43.00 a week and worked out a budget that included clothes, lunches, entertainment, school supplies, other incidentals AND savings–would it work?   Could she do it?  Is it an adequate sum?  I did some more rough figures (before I found the tables) by adding up the possible expenses today’s teen might have each week and here is what I came up with:  $15 toward travel (whether gas or subways/buses–our local bus system is $60 a month for a smart pass); 5 school lunches = $12.50; 0ne movie night $8.00 (minimum)…all of this totals $35.50 and doesn’t include clothing, savings, supplies, etc (or the hoards of food they eat at home).   So if you upped the allowance to $50 a week (hoping they would save $15 toward clothing–yeah right), you have upped the percentage (6.5%) of your income going to an allowance for just one teen. Oh, you have a couple more of them lying around the house?  (Rent them out–no, that won’t work.  Teens aren’t going for much these days…jusk kidding of course.)  Well, now you are spending 19.5% of your hard-earned income on allowances.  It really becomes staggering.  But no matter how you work it out for your family, I can see the value in having a budget for each child in the home.  It would teach them sooooooo much now so they don’t become clueless, high interest paying, perpetually in debt, borrowers in the future.

Ummm…I really spent more time on that than I planned.  Bored?  Too bad.  I’ve got more to cover.

“The Need of Planned Spending”

Ms. Greer makes these wise statements, “…looking forward to what one must spend money for is as necessary for  wise money handling as looking back to what has been spent…it is necessary to have a plan for spending.  Such planning makes for thrift, and being thrifty is a habit that one does well to acquire…Business and government make very definite plans for spending money….and home-making is a little business and a very important one.  The costs of running a home should be decided upon…the family income should be budgeted.” 

Many of us think of the word “budget” as negative–constricting, constraining.  But by thinking of it as described above helps one to see it as a necessity to successful home-management.  And do we want to live with balanced budgets OR take our cue from the Government (and that would be just about any government nowadays)?

“The General Income of a Family”

In order to budget successfully the first step taken is to “know what the family income amounts to”.  This would include wages, interest, dividends, commission–all taken into consideration to figure out “an average monthly income”.

“Expenditures:  A Budget Pattern”

“Household expenses may be grouped under six divisions: rent/house payment, food, clothing, operating expenses (light, fuel, and so on), advancement (education, recreation, and the like, and savings.”  I think those are basic divisions that still work for us today as well.  And how does one know how much to budget for what?  Ms. Greer says, “The following percentages are merely suggestions:

  1. Housing, 20%–rent or (if home is owned) taxes, insurance, interest on mortgage, repairs (including painting).
  2. Food, 20-25%–groceries and meat, or meals purchased outside the home.
  3. Clothing, 15%–ready-to-wear clothes, materials for clothes, underwear, hats, shoes, and other clothing accessories.  (Don’t you wish we still wore hats?)
  4. Operating Expenses, 15 to 20%–Family: light, fuel, telephone, water, laundry work, cleaning house or yard work.  Personal:  car fare, manicures, toilet articles, etc.  Automobiles:  gasoline, oil, repairs, license, insurance.
  5. Advancement (or development), 10-15%–Education: school fees, tuition, books, magazines, lectures, etc. Health: medical and dental fees, drugs, glasses.  Recreation:  entertainments, vacation trips, etc.  Benevolence:  contributions to church and charity
  6. Savings, 10 to 15%–money, life insurance.”

Ms. Greer does acknowledge that these “percentages will not hold for all incomes”.  Both how much a family makes and the cost of living in a particular area will come into play. 

Again, I was curious how these percentages work in our world today.  I remembered a financial table, “Abide by Financial Rules of Thumb to Prosper” by Gregory Karp in the book, “Living the Savvy Life” by Melissa Tosetti and Kevin Gibbons.  Among other items, these were suggested:

  • “House payment:  Your mortgage, including taxes and insurance, should not exceed 29 percent of your gross monthly income.*
  • Car payment:  All vehicle payments should not exceed 15 percent of your take-home pay.
  • Total debt:  Total monthly debt payments should not exceed 36 percent of your gross monthly income.”

For similar 2011 guidelines, please check out this link which also references Dave Ramsey’s recommendations as well.  Notice how the percentages have changed drastically in some categories (this is Dave Ramsey’s table):

Category Percentage of Overall Spending
Housing 25-35%
Utilities 5-10%
Transportation 10-15%
Healthcare 5-10%
Food 5-15%
Investments/Savings 5-10%
Debt Payments 5-10%
Charitable Giving 5-15%
Entertainment/Recreation 5-9%
Misc Personal 2-7%

 

I think I miss the fact that clothing is no longer recommended at 15%.  But maybe if I ate less….

This will end our lesson for today.  Next time we will focus more on the actual steps of planning and executing a budget.

How are you doing with your budget?  Have you found which percentages for what work best for you?  How do you feel about children having a sizeable allowance so that they can learn the art of budgeting? 

 

 

 

 

         

                    

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20 Comments

Filed under 1948 series, family matters, home sweet home, Uncategorized

20 responses to “how we dressed, lived and ate back in 1948–lesson 5a

  1. Love this post. I’ve taught Dave Ramsey’s course twice and have counselled clients on the appropriate percentages for their home budget, particularly for food, housing, activities, etc.

    Financial freedom, peace, or whatever one wants to title it doesn’t come about because your income magically exceeds your expenses. It is years of rigorous discipline, setting goals that are more important that the temporary wants of today, and a major attitude shift toward living below your means. And that always entails having to make choices.

    Credit allowed us to have “and’s”: big house AND car AND dining out AND new clothes AND vacations, etc. No more. You have to make a choice.

    This isn’t new – this was obvious to people in 1948! This is how my grandmother, who didn’t have a high school education, raised her children. This is how we need to raise our children, starting with the gluttonous child within.

    Good post, Bliss!

  2. Marvelous! And it hit home with me. Back when I was going to high school, my sister and I were given $10/week for pretty much everything. Obviously that wasn’t much! So every dime counted. We learned to walk a lot, plus eat at home, rather than school. I don’t remember a huge number of expenses, however. Boys paid for dates, and so much of my life was taken up by cheerleading (something my parents thankfully and kindly paid for) or schoolwork. The only things I wished for were nicer clothes (not more, just much nicer) and an electronic word processor (which I got for Christmas).

    Rebekah hit it right on the nose in her comments above: working with one’s money (budget) means making choices. I’m glad I learned that early on–it showed me what was important. That’s nice clothes, art supplies, and travel (sometimes in that order, often not). I now swear by special savings accounts for long-term expenditure goals (month in Paris anyone?!), and cutting up credit cards is quite freeing.

    I’m not good with percentages–so I can’t comment on that. But I think giving children’s an allowance is a good thing.

    • I am getting better about the choices. I find the more I really think and analyze my needs vs. my wants, I spend less on quantity but maybe a little more on quality. I had this conversation with my mom the other day. She talked about going out to buy some sheets for her bed and ended up getting some “great deal” (read: cheap) sheets (that she didn’t end up liking). But her decision came down to what money was available, right? I mentioned that maybe if she saved the money she had to spend right now, added more money to it whether next week, next month, then she could afford a better set a sheets that will make her happier and last longer. She was quiet for a little bit and then said, “yes, I see your point.” I know the kind of sheets she likes–they would be worth the wait and worth budgeting for. As a society we have to let go of the “have to have it now!” mentality. Choices need to be informed and calculated to avoid debt. xxBliss

  3. As always – GREAT POST! I must confess I do really well with our budget and then I fall off the wagon. Of course, it takes twice as much work to climb back on the wagon than before I fell off in the first place…you’d think I’d learn…

    However, we have worked really hard to eliminate all the credit cards (we don’t even have them anymore…too tempting), conserve where we can, use our coupons, grow our own vegetables (if, of course, Spring ever decides to appear), recycle, and reuse. These have been good lessons for our children as well.

    I am trying to morph Dave Ramsey’s knowledge into my system to become a self-proclaimed financial guru. I’ll let you know how that goes. In the meantime, THANK YOU for the great resources…back onto the wagon I go!

    • We all fall off the wagon at some point, don’t we? I am realizing I am falling off less frequently–so that is progress. It is great that you and your family have made such great strides with the credit cards, conserving and growing your food, etc.–Excellent!! I have to wonder, do you give allowances for your kids? How does that work with three??? (it is three kids, right?) xxBliss

      • Well, truthfully we have never really done the allowance thing. What we have done is once they hit Middle School, they earn a specific amount for achieving high honor roll and a lesser amount for achieving merit roll.

        I’m not sure if we have missed an opportunity with allowance, but we have always told them they are part of a family and as such they need to pitch in and help with our home. That said, if there is something special they want we do give them an opportunity to work for it. But for the most part, they have what they need. This summer will be the first they will have jobs, and we have already discussed how half goes right into the bank, and from the remainder they must determine an amount they feel they want to give to church/charity and the rest is for themselves.

        I’ll let you know how that goes!

  4. I noticed something interesting–the 1948 budget did not include debt payment, but both of the current tables did. It’s a sad look into what is considered “normal” monthly payments these days. We don’t have any children to give an allowance to, but maybe I should pretend & toss that weekly percentage into savings???

  5. Great post! Loved it. Such common sense. I really get frustrated with pushy clerks that want you to open a charge right then and there at the register and say “well you’ll get 15% off your total purchase and then you can turn right around and pay on your card with cash right away”. Do they think that really works? Nope. Not with me. I politely say “No thank you” and when they persist I tell them how ridiculous credit cards are! lol

    • Sadly, I have fallen for this more that I would like to admit. It is so stupid because I only did it for the savings and then never use the card again. But having too many cards out there can be bad on the credit score too, so I hear. That may be a next project–getting my report and closing out all the cards. I think it is sad that businesses are requiring the salespeople to have to say this all. the. time. Uuugh. Obviously it must work. xxBliss

  6. We used to give the kids a weekly allowance, but that started to cause tension in the home because if some chore or duty was not performed, we would want to dock or withhold allowance and that would cause them to be upset with us, and us to feel guilty or mad or frustrated. Now, with only one child left, we give her money at our discretion and she is required to do chores simply because she lives here and that is part of inhabiting a home. She doesn’t always get it when she asks. Sometimes we think it’s not something she needs – a luxury she should save for from her grade money, babysitting cash and birthday dough. With that money, she is free to buy anything she pleases (except piercings, tattoos, plastic surgery, alcohol, drugs ,ciggies, booty shorts, stripper shoes, push up bras, etc.).

    I used to have a budget for the house, but I have strayed away from it since our trip to Europe last fall. You see, that trip was my motivation for keeping a close watch on the comings and goings of our money. Now, I am much less motivated to be so watchful. I guess I need a new motive! Paris, anyone?

    • I love your list of exceptions! What a good belle-mere you are. I believe too that kids should have chores regardless of allowance. They should realize what it takes to run a household and what it means to be a team player. We had a really hard time with my belle-fille in this area–maybe because of going back and forth so much between two houses?? Her room was always horrible and she did little to voluntarily help around the house–but when she did she was always a great helper. Yet, between all the parents, she was never short on cash….hmmmmmm. Do I want a do-over? NON!!

      I agree too that it is easier to stay on budget when there is a goal in mind. Paris would definitely be incentive. : ) xxBliss

  7. Growing up, my parents weren’t the best role models when it came to budgeting (although I was given a set allowance). Luckily, Wilzie’e were. But I don’t really know if either of us know what percentages we spend on things…I am going to bring this to him!

  8. I could never make those percentages work, but I wish I could. It would make life so simple. Something just clicked for me one day that meant I lived below my means.

    I do believe children should be taught how to balance their budget from a young age. In the shop I often see school children buy their own shoes with their cash card, and the mother stands back. I think they must be given a budget for the year which they must buy things from. That’s pretty cool to me.

    • Living “below my means” sounds like a good place to be. I am constantly thinking about what we can do differently to live more economically. I have told Master Bliss that I would even consider down-sizing if needed. I love my house but I can make a home wherever I land. xxBliss

  9. Pingback: how we dressed, lived and ate back in 1948–lesson 5b | stepping my way to bliss

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