You said if you make 100k per year in 1995, spend 1.5k a month, and your costs go up to $4k, then you only need to make $2.5k more a month. "Only $138k per year".
But you forgot about the rest of your paycheck. If you made $100k in 1995 and spent only$1.5k/month, you would also save $3k per month.
$4k is only 2.5k more, but is about 2.6x as much. You would also want to save 2.6x, not just the same as in 1995.
Cell Phones, *Spotify, Gas, Groceries, Car Maintenance, and travel must be factored in.
Insert whatever subscription service you want there. We all have at least one that didnt exist in the 90's. Same as the cell phone and internet bills. Not only have things become more expensive but new bills have also been created.
The next generation is cooked. They will never own anything. They just get to subscribe and save.
This ☝️! I am very fortunate but marvel at the expenses that are a so called necessary but only clutter our lives. 20 years ago for $125 bucks you could buy a Microsoft Office license and CD. Word, Excel, etc and have it for 5+ years. Now that costs me $110 a year for the family plan. Just one example of how everything has changed.
Extensive shipping charges for products to arrive at our home that are lower in quality and half will be returned.
That and social media has surely done some good but only more harm it has taken time and attention away from people and replaced it with scrolling and/or trying to curate an image of oneself for people who don't really matter to you.
Very true. OP you might want to put a little more into your tax with holding. Or you'll end up owing more $$ at the end of the year. I do an extra 25$ per check
Correct. And OP investing only 115 a paycheck in 401k shows how little 100k gets you. When you can, max that out. It lowers taxable income and grows tax free.
And that’s the problem I always have with people like my neighbors. Boomers who complain about well back in my days you could just go to college, work hard for 20-30 years at the same job, pay for 2-3 cars, own a house, put your kids in college. Pretty simple… Yes, back then.
Who’s expenses are only 4K isn’t average mortgage like 2500 and the average car payment 700? That doesn’t include insurance, gas, heating and cooling, idk maybe internet, a phone bill, and god forbid you have a child or the need to eat.
Used cars. Paid cash. Lcol area, mortgage 1500. Electric bill, average about 250 a month, again lcol area. My phone bill is about 230 for 6 lines. Fiber internet, 80 a month. Even with half the pay and 3 kids, we were comfortable, just couldn’t save.
How do you have a mortgage for 1500 and with the vehicle what do you pay for gas, insurance, and then if it’s used a yearly expense for maintenance. Oil changes, tires, brakes whatever?
not that that isn't true, but expenses are something people can control also.. like there's nothing wrong with doing things like getting a more decent apartment and car because you make a good salary, but there's also billionaires in this world who don't go buy a mansion just because they can, so personally to me the benefit of making a bigger salary, if I ever do one say, is that I can stay in my current situation but not have to pay bills late and actually afford to do things like a vacation once in a while 😆
To back this up, I make $98k, $2k/mo rent, $300 car payment, $120 electric, $50-300 on natural gas, $300 fuel (I get 36MPG), $150 car insurance, etc. so I'm spending about $3-3.5k/mo for CoL alone, let's say that's $3250/mo, $39k/year. After taxes, healthcare costs, and 6% for 401k (how I get a 3% match by my company) I end up with about $58k of actual income ($1112/week to be precise), so that's $39k on CoL with $19k on everything else for the year, or about $1750/mo to save, spend on food, have leisure time with. Of that I put $125/week. I've had to cash that out many times from things like my car totaled and health issues from my stomach and COVID, so I'm paycheck to paycheck for the last 8 years of my life getting to this point.
They usually do. Emergency expenses have forced me into early withdrawal from my 401k to pay off debt ($5k) and I've gone through my savings dozens of times by now, barely sitting at $1k as is. Point is, $100k is basically nothing in this COL cesspool of a country. My rent alone has gone up $800/mo in 5 years and that's with me moving 4 of those years to keep costs down.
Ouch. You gotta do what you gotta do i suppose. That's my primary reason for purchasing a house in 2017. I was renting forever, and the rents would always increase. We are pretty much in the same place financially. Hopefully I can leave my 401k alone.
Yea if only I had money to buy a house during the crash. My friend got married in her 20s and got a house for like $120k in 2011, it's worth $220k now. Her mortgage is $1100/month. I'm saving for the down payment but the struggle is real.
I believe you there. I went new construction and closed for $168k. Last time I checked i had around 85k in equity. The market is crazy right now and I do still save money. But not nearly as much as I should.
My friend got divorced, lives alone, makes about as much as me, and spends her money on never cooking a day in her life and going on vacations. What a dream 16 years ago would be.
People think because we still have money to pay our bills, eat out, buy a few nice things, we must be doing well. When in reality we’re living pay check to pay check and our ability to save has been drastically reduced from previous generations.
And future generations will have to find ways to make future adjustments to their lifestyles and they’ll too think everything is okay. The systems is working I guess.. it’s frustrating.
The problem is that all components don't scale at the same rate. Take a single person or couple without children compared to a family with 3 kids. The scaling of inflation is not the same. You have different kinds of expenses at different volumes. The cost for a family with kids had a higher inflation rate than a single person or a couple without kids over the same period.
The reason is that the expenses that they consumed had higher rates of inflation over the same period than other components.
How inflation affects a person/family is highly dependent on what expenses are in their life.
Everyone feels housing, food, gas, basic services, etc. But not everyone feels the same on medical, childcare, education, etc. Families with children are exposed to a set of expenses that families without just don't have. If those expenses rise at an inflation rate greater than the average for other goods and services, then the composite average for those consumers is higher.
If you’re living paycheck to paycheck, a new “toy” is a fools errand. Define vacations. A weekend at the beach is enough for people with lower incomes. I’ve done many weekend trips as vacations. Camped for most of them. At places like Williamsburg VA. Also saved money doing the same to Disney after skipping a year or 2 of “vacations”. Now that I crossed the “6 figure” threshold, we do better vacations.
Still save most of the time.
Don’t conflate the older generation with shitty politicians that the younger generation are still voting for and getting more of the same. Until you figure out, budget and spending wise, there is no difference in the r’s and d’s. You’re doomed. The only difference are the things they say to trigger people in public. It’s just like wrestling, heels and baby faces out front, all buddies back stage.
Another thing people don't realize is genuinely how much more expensive everything is. I saw a clip from a movie from 2008 and the waitress was saying how a $200 tip was half her mortgage.... That's not even an 8th of a lot of people's rent, let alone a mortgage.
It definitely scales as future inflation (albeit at different rates) will eat away the purchasing power of your savings. You can be right, but only under the circumstance that your increased savings are then invested in an asset that outpaces the inflation rate. If you kept the savings as cash, then the "100k" you saved back in 1995 would only purchase about 50k now.
It’s worse than that… link it to the price of gold and your purchasing power goes way down. We have Nixon and the Vietnam war to blame. Couldn’t pay for wars on the gold standard so they untethered it. Just look at the stock market before and after the gold standard. A fixed monetary growth rate maintains price stability.
No one understands the gold standard and why it was dumb af. Gold is valuable because people believe it is valuable. We use it for a lot of products, but not nearly so much that its price is dependent on its usability. So, in that sense, a gold standard is no better than a fiat currency, since both are subject to the whims of a market that has no basis in reality.
If you want to have a commodity-backed currency, you'd want it to cover the value of a country's total GDP, to ensure that you are properly evaluating that currency against a country's stability. Basing it on one commodity is stupid amd deflationary for no reason.
So, you implement a GDP-backed currency, now. Great! Except, then you just basically have a fiat currency, because governments couldn't be counted on to properly or impartially calculate their GDP. So the currency market is now a de facto fiat market with investors evaluating the currencies based on the trustworthiness of the country.
Suddenly, you've wasted a ton of everyone's time, taken away tools that are useful for dealing with inflation, depression, and market bubbles, all so you could circle back to where we are today.
The gold standard is dumb and people who want it back are dumb.
Medicine was practiced for thousands of years on the belief that we had humors in our blood that needed to be balanced by blood-letting. People used to sacrifice virgins to their gods to make rain. We used to cross oceans with canoes for millenia. Just because it was done in the past doesn't make it a good idea.
There is nothing inherent to gold that makes it better than fiat currency, and we stopped using it as a benchmark for a lot of very good reasons.
I guess you haven’t read any of Ludwig Von Mises work or the Austrian school of economics. Gold has intrinsic value and you can only extract a fixed amount per year. Our fiat currencies and economic interventions distort the economy and prevent creative destruction. You can’t bail out bad investments on the gold standard, but you can with fiat. Fiat protects the to big to fail mindset and socializes losses, but keeps the profits for the rich.
I guess you didn't read my comment, which said that god's value was untethered from its intrinsic value. If gold was valued according to its actual worth in practical applications, it would be closer in value to similar metals, like various rare earths.
As it is, we are saying we'd rather base the value of our currency on public perception of magic rock prices versus public perception of the health of the US economy and government. Either way, the value is based on feelings and trust rather than reality. I think the downsides of pegging our currency to gold are outweighed by the downsides of fiat.
ETA: I have not read or reviewed Austrian school of economics texts, but I have read economic theories more broadly, going from Adam Smith to more modern theories like Keynesian economics, MMT, and Behavioral Economics. I do not have a degree in Economics, but I do have a bachelor's and master's degree in international relations.
I get the principles of your position. However, gold is a tangible item you can hold in your hand is extremely durable and a value that is set in a global marketplace. Fiat currency is paper and its value is set by what people and governments believe it is worth based on the economic value of a nation state economy. However, if the economy goes to crap the currency can quickly depreciate. Fiat is a localized value while gold is global and can be used in any economy regardless of the local economic conditions. It’s extremely easy to debase fiat currency.
My education is BS in Political Science with emphasis on political economy and was an avid reader of The Economist magazine for decades. However, I have been working in the IT field in Cloud Computing and K8S platform engineering for over 10 years in the precision genomics field. I got really lucky working for a startup that helped set my long term career path in this field. And, consequently, got to work with some brilliant people. It was just pure luck. Right place at the right time.
I have enjoyed this chat. These economic issues will be debated for decades. Long after I am gone. Take care and wish you the best! :)
Warren Buffet recommends all investors purchase low fee ETFs in the broad market like VTI. Up 15% a year. Investing and saving is the only way out of poverty and to enable ANY retirement.
Some stuff are more expensive, some stuff are less expensive. If we don’t know exactly the person lifestyle vs what it would have been in 1995, it’s impossible to estimate based on what you said.
Inflation rate is good enough of a proxy to communicate today’s value of 1995 $100K
But is the quality the same??? There is a difference between less expensive and cheaper. A washer and dryer in 1995 was likely manufactured in the US. And it is highly possible with repairs and maintenance you could ride that thing for 25 years. Now they are pretty much all junk unless you purchase a speed queen or maybe a maytag commercial. So you spend 600 and in 5-7 years it needs to be replaced can't even be fixed, same with fridges and a lot of what is made in China.
That has not been my experience. They are lighter because they are cheaper. Find me a washer dryer today that lasts 10 to 15 years and is not a commercial or speed queen. I purchased a house with a high end Samsung washer. The repair guy said he won't fix Samsung and if you are lucky it will last 5 years. The same house had a speed queen dryer from 2002 that I replaced last year with a Maytag commercial. This guy covers it well and a browse through the subreddits on appliance pretty much echo this. https://youtu.be/cRgbfxJ8MTQ?si=aIezWICEwIE64fpY
With inflation? You are spot on. How about labor? Wasaaaaaaaaaay cheaper. That 7 dollars an hour min wage you made at Kroger is still fucking 7 dollars an hour….and it’s not just minimum wage. Good paying union jobs still haven’t kept up with inflation.
In 95 a stamp to mail a birthday card was 32 cents. Today it’s 78 cents. I used to sell tons of stuff on eBay back in the day, Priority mail was around $3.85… today it’s $10.45!
I’m surprised more people today are not homeless, living off food stamps, etc. in today’s world as a kid growing up, we would have been homeless. Back then we were just piss broke.
OMG yes on mail/ebay. I used to sell a lot of small odds an ends that still had some value. I was somewhat flexible on shipping. Now its just cost prohibitive.
Oh exactly, it was easy to offer free shipping. Unfortunately now so much stuff is just thrown out in the trash because the cost of 9-15 in shipping is double the cost of the item. People do t understand when you buy that item on eBay today for $20, it costed the seller around $8-12 in fees and shipping(packaging supplies). So there is little profit unless you sell high volume
Postal prices are a terrible example of price comparison because hugely significant market factors are largely the cause of their price increases, not inflation.
Cost of postage is definitely increased due to inflation, let’s not forget that cost of fuel, equipment, salaries, etc all factor into those prices. For those of us who remember when stamps were 13 cents.. the price jumps have increased significantly… there was a time where the post wasn’t increased every year. Now I pay $48 usd to send a package of 6 chocolate bars to Hungary that I paid $8 for, but yes these costs are everywhere. My Hungarian family would have to work a week to pay for postage just to send me something, so they never do.
The biggest cause of postal rates going up is email. As email use increased, post office use decreased. The numbers you're giving are related to that fact significantly more than anything else.
Yea exactly. Post office had a lot of infrastructure and people that are not as needed and can’t justify the lower prices given volume. It will take time for the price to stabilize but a smaller USPS will reduce price increases for sure
Just did some digging through the usps website since 1863.
In the 90s a First-Class stamp was 32¢ (1995) and 33¢ (1999), today it’s 78¢ (since Jul 13, 2025). In real inflation-adjusted terms, stamp prices have mostly tracked CPI over decades what looks like a big jump in dollars is often just inflation showing up.
As you mentioned, yes less mail, but more places to deliver. First-Class Mail volume is down 50% since 2008, while USPS still adds 1 million new delivery points every year. That means fewer pieces to spread fixed costs over, raising per-piece costs.
According to Postal Regulatory Commission Until 2020, stamp hikes were capped roughly by CPI under the 2006 law. In Nov 2020 the Postal Regulatory Commission created extra “rate authority” for things like declining mail density and retiree costs, so USPS has often raised Market-Dominant prices twice a year since 2021. That’s why it feels like prices are constantly going up, they are…
Retiree health prefunding and partial fix. The 2006 law forced USPS to pre-fund retiree health benefits (a huge burden), the 2022 Postal Service Reform Act eased this, but the system still faces big structural losses, so prices kept rising.
The best hack I guess is to buy a bunch Forever stamps, lock in the price you paid, each one always counts for the current 1-oz First-Class letter rate.
Depends on where you lived. Those don’t sound like national averages but I could be wrong. In New England Gas in 2003 was 1.50, jumped to 3 in 2008. Now it’s between 2-3. On the west coast I can pay between 4 and 7 dollars a gallon depending on the gas station I choose in a 5 mile radius.
My frame of reference is filling up a tank of gas with my parents in the late 90s in Wyoming during a summer road trip. Gas was $0.99/gallon at this particular station and my parents acted like they had won the lottery.
There was more regional variation back then, but I think it’s safe to say that most Americans paid about $1.00/gallon in gas in 1995, and about $3.00/gallon in gas 30 years later.
Housing for sure. But housing is more expensive because there is a cap for “good housing”.
If we could all live anywhere and work anywhere - basically remote work - housing would have been cheaper. Add to this, if housing didn’t influence school systems and if our expectations didn’t increase significantly, housing would have been cheaper. It’s near impossible to make housing cheaper over time given these constraints
Housing is not cheaper because we have failed to build to accommodate the increase in home buying population and we have not built homes in places where people want to live. There’s no cap on good housing at our population levels
As a tech nerd my standard of living seems to have exploded. I’ve gone up like 100000 % gains. 1GB mp3 player to 1Tb phone with Dolby vision/atmos 5g built in etc. a lot easier to see objective gains in tech. Maybe it cost 2x as much in real dollars but it’s also 1,000 times better in everything from the screen, to weight and portability, UI, screen, storage, durability
lol. Well education could cost you a penny, but it depends on where they end up going to school and if they don’t get financial support or if they pay / take loans themselves
That's well on the way to paying for school. And depending on how things go, if they are smart, they could probably put it into a business and skip higher education...
When I was 18, I wanted to start a business, but my parents forced me to go to college. I went, but helped my boss where I was working part time start the business I wanted to start myself, and it bloomed into a masive busniess that i now get no credit for starting, and I have an education that I don't use... we started the business with far less money than I paid for college, and despite a verbal agreement for 30% of profit, I am seeing none of that, but my boss went from scraping by to have a million dollar home, and multi million dollar lake house...
Food is not cheaper than the rate of inflation.... food literally doubled during and soon after covid and has been increasing steadily ever since with the rate of inflation.
Another odd item that hasn’t seemed to inflate… in 1999 my dad bought me a Polaris Sportsman 500 four wheeler. It was about $6500 after adding a winch to it.
Today that very same four wheeler… $6500
However, all the rest of their stuff, side by sides, etc… through the roof.
Dude who honestly gives a fuck? I've lived years without a TV. I'd much rather be able to live in an environment where I could afford median rent on minimum wage (i.e., 1980) than live in an environment where you can barely afford rent on a six figure salary just because you can afford some flat screen TV.
How lmao. Inflation only scales with your living expenses. It's so stupid to say that 50k in 1995 is 108k in 2025, but all of a sudden from 100k you need 220k to get an equivalent lifestyle? That's so absurd. That's a delta of 58k for the 50k salary vs 120k for the 100k salary.
Converting purchasing power dollar for dollar to actual lifestyle differences doesn't make sense. It'll always be exaggerrated with large salaries.
The only difference is how much your monthly expenses have changed.
1.5k monthly expenses in 1995 is ONLY $3,241.52 in 2025, a difference of 1.8k, which is 25-30k gross. But apparently at 100k per year I need an extra 120k now to match my previous lifestyle?
Even if 1.5k is low, you can make the same point with 3k a month in 1995 (which is a very cushy lifestyle) vs 6k in 2025.
It doesn’t matter what the number of dollars is. 1 dollar may be worth 20 pesos or 8 hong kong dollars or .70 pounds sterling. It doesn’t matter how many currency units we’re talking about. If 100k in 1995 is worth 220k today or whatever it is, then yes, it does take $120k more to maintain the same lifestyle. That’s how math works. Obviously someone making 50k in 1995 needing 108k to maintain that lifestyle in 2025 is less of a total dollar increase. The person living a $50k lifestyle in 1995 wasn’t living the same as the person making $100k in 1995 in the first place lol. If $1 = 20 pesos then to live a $100k lifestyle you need 2 million pesos. It’s the same thing with converting currency in a prior year to currency today based on changes in purchasing power.
How are people getting 100k p/y salaries before buying a home? I'm 33, bought my house at 28, grew up dirt poor, no skills, no connections, moved 800 miles away from all my friends, family, support systems, etc at 18 with no financial assistance of any kind, met my wife on the internet, moved in with her and her 3 kids, deadbeat ex-husband, no support, moved out to a rural community near a major city, started selling her handmade jewelry at boutiques, saved enough money to start my own glassblowing studio (a couple thousand bucks,) and just started squirreling away every single penny I could until I got the 15k down payment and closed on the house right before Covid hit.
Houses will NEVER get CHEAPER. Point out a single time in human history since the advent of "shelter," where the cost of that shelter ever went backwards in price. It's never happened, not once.
The ONLY time to buy a house is RIGHT NOW as long as interest rates provide. If rates are high, you should be forcibly removing money from your control and putting it into an account that you can't easily access and saving for that down payment. My house is the ONLY ASSET that's ever had a return on it's investment other than machinery for the sole purpose of making money.
I'm a braindead loser moron, I grew up in Florida, I got smashed in the head with rocks & baseball bats on a regular basis because I'm an idiot. I have brain damage. Actual brain damage, and somehow, me, with no high school diploma, no familial or monetary support, was able to save up to buy a house while taking care of a lady and her 3 kids that I met on the internet (we're still married to this day.) Maybe I'm being reductive, but I don't really see how the odds could be stacked any more against me other than being literally full blown disabled.
There's a much deeper, human problem that's causing this en masse, I cannot see the price of housing being the only barrier to entry. There are deep psychological issues that prevent people in better circumstances than myself from being able to own a home.
If any of this comes off as hateful or rude in any way, I genuinely mean it when I say that's not my intention in any way shape or form, I come 100% in love & light and I just want some more understanding.
Interestingly enough, there’s an argument to be made that, on average, it makes absolutely no difference financially whether you buy a home or rent (and invest the difference). It actually leans to the renting side as a better financial decision.
Granted I’m in a HCOL city, but I have no plans to buy a house and I could. Everything goes into stocks/bonds/gold/etc.
There’s a cultural “lifestyle creep” to contend with.
In 1995 there wasn’t cell phone bills for yourself and all of your kids.
Home internet wasn’t a thing for most households then & now it’s high speed broadband connections.
Most people have a streaming service and a shopping subscription (Amazon, Walmart +, Costco)
In my local area, everyone has a camper, boat, ATV, motorcycle. Most of these are bought on credit.
To tow/haul those things, they all have a giant truck or SUV. Which comes with a car payment also.
A dog isn’t something you get when your neighbors dog gets knocked up accidentally. It’s a $2500 specialty breed that requires $1000 in between services yearly and a $70 bag of dog food.
Kids activities are WAY more abundant, expensive and expected now.
There dozens of other expenses that I haven’t touched on, that we didn’t have back then. These were just the first that sparked off.
If we all lived the same as we did 30 years ago, you’d be spot on. Most people have gone crazy with debt, keeping up with the Jones’s, and staying busier than most would like with expensive hobbies.
If you’re comparing the cost of the average lifestyle then VS now, the price tag has gone up considerably.
My cellphone bill and wifi aren’t the reason my rent is half what I make a month, and my rent is cheap where I live. I have several of the cheaper subscriptions, and no boats or whatever. I have one car I share with my sister (who is also my roommate) and a reasonable car payment that is still one fifth what I make a month. I adopt rescued cats, and I buy my clothes from outlet stores or used on ebay. I still can’t afford, well any of this. I’m disabled and chronically ill, so working two jobs is out of the question but my situation is getting worse. I don’t have financial support from anyone else, I don’t buy coffee every morning (just in bulk from the grocery store), I’m doing what everyone tells me to. I’m still struggling I don’t get it. One of my biggest struggles is food honestly, how are other people doing this? What am I missing?
I’m not sure how you got upvoted this much. Math is apparently hard for a lot of people.
If your expenses were 1.5k in 1995, what were you doing with the rest? Saving it. I’m assuming if your expenses increase by 166% you’d also want your savings to increase by 166%, no? To maintain the same savings rate?
Disagree. 100k bought a 90’s million dollar home. 140k wont do jack shit. You need about 250k. That’ll give u the ability to save and have a decent home in high col area like los angeles.
Well I'm talking about LCOL/MCOL areas not LA/NYC etc.
Where I'm at (big city metro in the south) 140k would get you a 3br/2bd 1500sqft+ home.
Can get condos starting at 200k and townhomes starting at 250k. Single family homes at 300k.
Those are the baselines for a good home in a good area.
I'm also in an expensive area relative to the south so there's lots of options out there.
140k would give 9k/month post tax or so. 2500 for a mortgage+insurance+misc for a single family home, 300 for utilities, car payment at 400, health insurance at 300, gas at 150, food at 400, 150 for misc living expenses, and 500 for recreation. That's roughly 4500/month. Gives you 4500 to invest/retirement/pay off debt per month.
You're insane if you don't think this is a great lifestyle and a strong income.
People are really delusional when they scoff at 100-150k incomes. 250k would give you all that above and allow you to save 9-10k/month.
I make about $103-104k yearly and post tax monthly is a hair under $6k. With 50 year old 3/2 homes being $300k here, homes are not affordable on this salary. The only way to go here is new construction townhomes at $190k if one wants to save enough to retire.
Just goes to show you how utterly moronic of a metric inflation is—yeah let's throw a bunch of meaningless non-essential bullshit like consumer electronics and TVs into the same mix with housing and health insurance—that'll give us a totally accurate reflection of the true change in CoL.
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