Will You Ever Have Enough Money?

A recent visit to New York opened a forgotten wound.

I realized, once again, that I did not earn enough money to live in New York, that I have never earned enough money to live in New York and, at 57, that I will never earn enough money to live in New York. Perhaps it was the minimalist hotel room that cost over $300 a night when all the taxes were added. Perhaps it was the fact that a New York Houston’s hamburger cost one-third more than a Dallas Houston’s hamburger. Perhaps it was the observation that the cost of parking a car in mid-town Manhattan (if you were crazy enough to have one) was a handsome multiple of the minimum wage. Or perhaps it was a few hours spent with an old friend as she explained the absolute necessity of having $200,000 a year, after taxes, to sustain herself.

Whatever it was this time, the result was the same as I experienced when visiting New York in my twenties, thirties, and forties: A sense of Failure. Each time I left, I vowed that when I returned I would be earning enough money to feel at ease in the Big Apple.

It has never happened.

Now I learn that this is a rather common angst and that it doesn’t require a plane fare to New York to experience it. It can be experienced in Peoria and it can be experienced by anyone.

It turns out that most of us believe our lives will be comfortable when we earn just a bit more money than we already earn. Indeed, a regular survey by the Roper Center at the University of Connecticut has shown this over a period of twenty years. In 1978 the median income was $17,640 but the median estimate of a “comfortable” income was $19,600. By 1994 the median income had more than doubled to $38,782 but a “comfortable” income had increased $40,000.

The Median Income versus What People Believe is a Comfortable Income

Source: Juliet Schor, The Overspent American, pg. 99

Still more vexing, another survey shows that the amount of income people believed they needed to “fulfill all their dreams” has been rising much faster than inflation. Pegged at $50,000 in 1987, the survey had a median response of $90,000 in 1996. That’s an increase of 80 percent, a hefty premium over the rate of inflation.

I learned this reading Juliet Schor’s The Overspent American (Basic Books, $25 hardbound, 251 pages) in which she explains that more people earn more money than ever before… but feel it isn’t enough. A 1995 Merck Family Fund poll, for instance, shows that 27 percent of people earning over $100,000 a year agreed with the statement, “I cannot afford to buy everything I really need.” (42 percent of those earning $50,000 to $74,999 said the same, as did 39 percent of those earning $75,000 to $100,000).

The problem, Ms. Schor writes, is that our “reference group” has changed. Where our spending was once influenced by our immediate neighbors, it is now influenced by visible groups with much higher incomes such as top executives and TV families. In one surprising study result, Ms. Schor found that watching TV cost about $208 an hour because of how it influenced spending behavior. That’s the exact opposite of the common belief that watching television is an inexpensive time absorber.

Why does watching TV cost so much?

Because it creates specific brand identifications. It promotes premium pricing. If you don’t own $100 Nikes, wear designer jeans, drive a Lexus, and take vacations in Tuscany (last year), well, you’re out of it. What can I say? To be an acceptable human being, our new reference group tells us, you must spend on this sort of thing.

The result is a lot of overspending, credit card debt, heavy interest charges, and stress as families try to juggle two jobs, kids, big mortgages, and tuition payments that would support a small village in any reasonably pre-emerging nation.

The remedy?

Downshifting, making a deliberate decision to work less and spend less. In another survey Ms. Schor found that between 1990 and 1996 about 19 percent of all adult Americans had made changes that involved earning less money. More important, they did it voluntarily. Another 3 percent did it involuntarily but were pleased with the result.

Seeking a less material lifestyle isn’t a new idea. It’s an old idea. We could talk about Henry David Thoreau. In the post war period we could talk about Vance Packard, Philip Slater, Duane Elgin, and others.

What is striking today is that “downshifting” isn’t an ideology. We now live in a society rich enough that downshifting is both possible and a trend— a trend that appears to involve about 20 percent of all Americans.

Me, I’m starting easy. I’m eliminating New York as my reference group.

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Photo: Pixabay

(c) Scott Burns, 2022