4 About Personal Finance Schemes

This is how Americans spend their money1 (According to a study conducted by Bureau of Labor Statistics):

Like most totals when you’re dealing with hundreds of millions of people, each person’s spending is probably somewhat different from these averages.

But straightforwardly, these numbers seem right to me from a big-picture perspective. The two biggest components of most families are housing and transportation.

These two categories make up half the budget of the average American household.

If you want to move forward financially, you have to grant housing and transportation rights. If you spend a lot of money on your living situation, your car, or both, you will have a hard time building wealth.

I don’t like to shame people, but for several years I’ve been concerned about how much people spend trucks And the SUV cars.

out of control.

Look at this graph showing the percentage of residents by state who pay $1,000 per month or more for automatic payments:

A quarter of people in Wyoming spend more than $1,000 a month! More than a fifth of people in Texas do the same. It’s roughly 1 in 5 in California.

This is a personal finance frenzy.

There are a number of economic reasons that have led to an increase in these payments in recent years. The shortage in the supply chain has driven up the cost of cars and it’s still not normal.

In the past three years alone, the price of new cars has increased by more than 20%. Used car prices have increased by more than 45%:

Anyone who has had the unfortunate need to buy a car has been in a difficult situation in recent years.

But this is not the full explanation. Look at the increase in luxury car purchases over the past 10 years:

Almost 20%.

I’m a first to second class guy when it comes to my car. Some people enjoy driving a nice car, truck, or SUV.

And that’s fine – assuming you have the rest of your money in order and that you save money.

If you don’t save enough, your ridiculously high monthly payment from an SUV or a truck is the likely reason holding your fortune back.

And if your choice of vehicle isn’t, it may be housing that’s holding you back.

The The New York Times Make the case this week that the housing market is worse than you think.

I tend to agree.

They show that the number of single-family homes for sale is still near a 40-year low:

But this graph is worse than it looks. The Times reports that the US population has risen by more than 40% since 1982.

There were about 230 million people in the United States in 1982. There are now more than 330 million people. The ratio for each person is much worse now.

The same is true when it comes to the number of new homes being built. I adjusted housing in the United States (when construction begins on a new home) for residents dating back to 1959:

We were building more homes than the population size in the 60s, 70s and 80s. Things were fine in the ’90s, too.

then Real estate bubble burst in the 2000s and We’ve never come close to those levels again.

In 1959, there were approximately 176 million people in the United States and we were building about 1.6 million homes annually.

We now have 333 million people and the most recent reading shows we built 1.4 million homes in the last year.

Unfortunately, There is a lot of luck when it comes to your housing situation. Sure, there are people who buy more home than they can afford, but many people feel like failure or luck based on when they were born and where we are in the housing cycle.

Home prices are already starting to swing from high mortgage rates but the mortgage rates themselves have now made buying a home more expensive.

Things will eventually settle down and hopefully, mortgage rates will go down in the coming years.

But if we don’t build more homes in this country, buying a home will be harder and harder for the young people in the future.

Michael and I talked about car prices, the housing market, and more in this week’s Animal Spirits video:

participation in the complex So you don’t miss an episode.

In-depth reading:
Is Ford F-150 Partially Responsible for the Retirement Savings Crisis?

Now this is what I was reading recently:

1This is as a percentage of after-tax income.

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