Cost of Living Comparison-1973 versus 2013

Posted by in Articles, personal finance | 6 comments

Cost of Living Comparison-1973 versus 2013

The “Remember When…” booklets that are found at car washes or random gift shops supplied some of the data found below. Other sources such as TheCostofLiving.com and Trulia’s average home sale prices filled in the holes.

Cost of living 1973 versus 2013

Cost of living 1973 versus 2013

In the last 40 years prices have increased quite a bit. But let’s look at percent increases for the cost of living in 1973 compared to 2013:

  • Salaries have increased almost 400% since 1973, BUT…

Compared to cost increases since 1973…

  • Housing has increased 4.61 times, or 461%
  • Groceries have increased 4.5 times, or 450%
  • New car has increased 8 times, or 800% 
  • Gasoline has kept pace with car price increases at 9.37 times, or 937% 
  • Average rent has increased 5.8 times, or 580%

Not surprising, but salaries have just not kept pace with daily expenses. (I did a similar cost of living comparison two years ago with similarly dismal results.)

Of course, averages are just averages. There are plenty of people making more than the average annual salary in their particular state. For those that make more, the cost of living doesn’t affect their pocketbooks quite as much.

As for housing, cost is completely dependent on where you live. New York, San Francisco and Los Angeles on one end of the spectrum might push that average price a bit higher than average home prices in the mid-west or the southern states. In Arizona, a state hit hard by the housing bust, average home sales are now at a very low $128,000 (Phoenix area 2012). That’s a bit less than the even the national average of $152K.

Bottom line: No matter how much income you generate you should always try to live in a state you can afford, save more than you spend and keep your debt in check.

Has your salary increased as much as groceries? Is your rent half of your income?

6 Comments

Join the conversation and post a comment.

  1. Christian L.

    How upsetting! Not to be a pessimist, but I just don’t see salaries catching up to these over inflated costs.

    -Christian L. @ Smart Military Money

    • Little House

      Unfortunately, salaries have not kept pace with the cost of living. I try and be optimistic, but you may be right; we might not see salaries catching up anytime soon!

  2. krantcents

    In terms of averages, you may be right! It may not matter, if your salary does not increase.

    • Little House

      I should probably go back even further and do a cost analysis before the 1930′s to get a different view of things. I often wonder if the decades between WWII and the 1990′s were more affluent because our economy was growing (for the most part – minus the few recessions in between.) Would make for an interesting post. ;)

  3. Daisy @ Prairie Eco Thrifter

    Wow, those are some telling numbers. I can’t believe the cost of a car increasing by 800%! That’s just insane! And they aren’t built as well, either.

Trackbacks/Pingbacks

  1. Carnival of Financial Independence, 12th edition - Reach Financial Independence - [...] House @ Little House in the Valley writes Cost of Living Comparison – My parents were artists – a …
  2. Carnival of Retirement- May 27th | Master the Art of Saving - [...] House @ Little House in the Valley writes Cost of Living Comparison – My parents were artists – a …
  3. Carnival of Financial Planning - Belated Edition | Budgeting In the Fun Stuff - [...] House @ Little House in the Valley writes Cost of Living Comparison – No matter how much income you …
  4. Little House in the Valley - Home Designs, Plans, and Ideas for Smaller Living - […] income and expenses from different decades, the 1970′s mostly,  in previous posts (see here and here). Most of the …

Leave a Comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>