Over the past few years, the cost of living in the United States has risen dramatically. The news tells me that people can’t make ends meet. Even high-income families are having trouble keeping up with their bills. This is due to the high inflation over the past few years. Housing, transportation, and groceries are more expensive than ever. It’s hard to live in the United States these days. Young families in particular seem to be struggling the most. Is the United States becoming unaffordable?
The cost of living at RB40 House hit an all-time high last year. However, I feel like we are doing well financially. Our net worth is higher than ever and we have saved a lot of money in the past year. We are more stable than many families and our fixed expenses haven’t increased much. Our yearly spending has increased, but that’s mostly due to discretionary spending. Our core expenses are under control.
Today I will review our expenses in detail and see what has happened over the past ten years.
Annual expenses
Here is a chart of our annual expenses since 2012.
I’ve been keeping a detailed spreadsheet of our expenses since 2012 for blogging purposes. It’s a bit obsessive, but the data has come in handy on many occasions. I highly recommend tracking your expenses if you want to improve your personal finances. You need to know where your money is going.
Overall, our annual spending looks good, showing the different stages of our lives we have been through.
2011 – I didn’t keep a detailed record in 2011, but we spent a lot more than we did in 2012. Child care was part of our expenses that year. I think we spent about $12,000 on child care in 2011. I’m sure child care costs today are much higher than that now.
2012 – I retired from my engineering career to become a stay-at-home mom/blogger. We lost about 2/3 of our income and I became very frugal. I got my RB40Jr out of daycare and it has been very helpful.
2013 to 2018 – RB40Jr started going to elementary school. Childcare costs went up a bit, but they were much cheaper than childcare. Once he was in public school, our child-related expenses were much lower.
2019 – Housing expenses dropped dramatically when we moved into our own duplex. We rent one unit and share many of the expenses with the tenant. I also started sending money to my parents to help with their living expenses.
2022 – Our annual expenses increased significantly. This was due to travel and sending extra money to my parents. My mother was in the hospital and I wanted to help her more. RB40Jr also had more extracurricular activities as he got older.
Categories
Housing – Moving into a duplex was a big difference. We used to live in an apartment and our housing costs were constantly rising. Our homeowners association fees and property taxes were going up every year. I also refinanced the duplex to lower the payment a little.
communications – I bought our 2010 Mazda5 for $18,000 cash before the RB40Jr was born. The car is still going strong and I hope it will last until he graduates high school. I feel very fortunate to have a reliable car. New and used cars are much more expensive now. In 2023, I started driving cars to provide some extra income. Transportation expenses have increased slightly due to increased gas mileage.
Grocery – Everyone here feels the inflation. I complain about the rising prices every time I go to the grocery store. Yet groceries are a small part of our annual expenses. Our grocery spending has increased, but it is negligible compared to other categories. Maybe I should stop complaining about the rising prices of eggs and milk.
travels – Here’s why. Travel has increased our annual expenses significantly. Like most people, we were stuck at home during the pandemic and spent a lot of money on travel afterward. I think we’ve had enough. Next year, we plan to visit friends and family in the US. We’ll take a break from international travel for a year or two. Travel seems to cost a lot more than it did pre-pandemic days. Also, we want to travel more comfortably now. These days, we prefer to stay in a business hotel rather than a cheap motel.
child + parent – My dad told me to stop sending money, so this category will be down next year. But RB40Jr has more activities now. This year, he has a school trip to the Dominican Republic and a number of extracurricular activities. He is also about to start college in 5 years. Higher education will increase this category tremendously. I hope he can get a scholarship or two.
conclusion
The United States has seen massive inflation over the past few years. Young families are struggling, but don’t lose hope. Keep working hard and saving money. Eventually, things will get better. Older families have an advantage because we are more stable. The basic expenses of a family of 40 are lower than many younger families. But it wasn’t always that way. The mortgage rate on my first home was 8% in 2000. We struggled when we were young, too. Heads up!
Have your household expenses increased over the past few years? Is life in the United States becoming more difficult than ever?
Image credit: Fabien Blanc
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