More on cars than kids? Wow. I am genuinely surprised.
I’m not surprised at all. People think kids are way more expensive than they really are, and think that cars are much cheaper than they really are.
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The Average American Spends $3.3M over Their Lifetime
51–60 of 62 posts
Re: The Average American Spends $3.3M over Their Lifetime
#52Earlier quoted context omitted.
Sure, but after people stop working it's common for them to replace their working income with Social Security, other pensions, and withdrawals from retirement accounts in which their savings compounded over time. And the median household income is actually $75k now. I'm just saying that $55k is very much in the ballpark for the median person. Does it really matter if that's before or after taxes?
> Sure, but after people stop working it's common for them to replace their working income with Social Security, other pensions, and withdrawals from retirement accounts in which their savings compounded over time. Agreed, but there was no room for savings in your model as you used the whole income as spending (median income * 60 years). Taxes makes a big difference too since it doesn't count as spending. E.g. someon…
$25k in taxes on a $55k income? Where are you from?
For a family in 2024, at the Federal level, the first $29,200 is untaxed because of the standard deduction. The remainder would be taxed at 10-12%. Child tax credits can easily wipe that out and make the liability negative (i.e. you get all your tax withholdings refunded plus another couple thousand dollars).
State income taxes will vary, but are typically lower than Federal income taxes. Many have no income tax.
Re: The Average American Spends $3.3M over Their Lifetime
#53Earlier quoted context omitted.
I look around at my neighbors, my friends... everyone must be doing better off than me OR everyone is just constantly living in debt and considering a car payment a permanent "tax to live" because I see people with new cars (if used, very late model) everywhere. I am terrified of one of my cars breaking (both Toyotas, thankfully, fingers crossed, knock on wood). I dread having to buy another car when these are done.
Haha, I feel the same way when I compare with my neighbors! I have a “really decent” job in tech, and live comfortably, but my family does it by living in a modest sized home, driving a 15 year old car, 7 year old phone, and basically never taking vacations. But when I go drop my kid off to visit her friends, everyone’s got ginormous homes, some on acreage, beautiful furniture, 0-3 year old cars, all the latest gadge…
Same here. But I know how they do it because I have some family like that: they're hip deep in debt and will never figure out how bad the situation really is until the inflow of cash that allows them to pay the interest on all of their loans stops. Then there will be a rather rude adjustment in life style.
Re: The Average American Spends $3.3M over Their Lifetime
#54Earlier quoted context omitted.
It’s the opposite actually. Very Rich people consume far less than average in proportion to their wealth and income. When you look at what people actually consume, the US at least looks very egalitarian.
That wouldn't prevent them from pulling the average up above the median though. Even if billionaires don't spend 30% of their income on housing, they still probably spend more than most people.
In absolute sense, yes. But in a relative sense the portion they spend on housing is going to be much smaller than what your 'average income' person spends on housing. On top of that they probably own their properties outright whereas the average income person ends up paying interest on the bulk of the price of their home for decades.
Re: The Average American Spends $3.3M over Their Lifetime
#55Earlier quoted context omitted.
That wouldn't prevent them from pulling the average up above the median though. Even if billionaires don't spend 30% of their income on housing, they still probably spend more than most people.
In absolute sense, yes. But in a relative sense the portion they spend on housing is going to be much smaller than what your 'average income' person spends on housing. On top of that they probably own their properties outright whereas the average income person ends up paying interest on the bulk of the price of their home for decades.
Yes but the article is talking about the total amount of money the average American spends in their lifetime as an absolute number. If a billionaire spends 100x less of their wealth compared to the average person, they could still skew the distribution, just not by as much as if they spend even more than that.
Re: The Average American Spends $3.3M over Their Lifetime
#56Only in America can people spend more on their cars than on their children!
Re: The Average American Spends $3.3M over Their Lifetime
#57Earlier quoted context omitted.
> Sure, but after people stop working it's common for them to replace their working income with Social Security, other pensions, and withdrawals from retirement accounts in which their savings compounded over time. Agreed, but there was no room for savings in your model as you used the whole income as spending (median income * 60 years). Taxes makes a big difference too since it doesn't count as spending. E.g. someon…
$25k in taxes on a $55k income? Where are you from? For a family in 2024, at the Federal level, the first $29,200 is untaxed because of the standard deduction. The remainder would be taxed at 10-12%. Child tax credits can easily wipe that out and make the liability negative (i.e. you get all your tax withholdings refunded plus another couple thousand dollars). State income taxes will vary, but are typically lower tha…
Just picked an arbitrary number to illustrate. Regardless, we are far from the $3.3M figure. The point is simply that median income * 60 years is not a reasonable approximation for lifetime spending.
Re: The Average American Spends $3.3M over Their Lifetime
#58Keep in mind that zero Americans were actually surveyed to arrive at this figure. The methodology was simply extrapolate from price indexes of things we think people pay for . https://www.onemainfinancial.com/personal-loans/where-americ...
The nothing-else-to-do "work" of a "data scientist" no doubt.
Re: The Average American Spends $3.3M over Their Lifetime
#59More on cars than kids? Wow. I am genuinely surprised.
If you exclude third-party childcare, kids aren't that expensive in direct costs. So a typical family with an at-home caretaker sending the child to a public school and going on local vacations on their, well, car might indeed end up spending more in cars than the child.
Kids are very expensive, however, in opportunity costs - but that wouldn't appear here.
Re: The Average American Spends $3.3M over Their Lifetime
#60I don't know why this would be unbelievable or "whopping." $3.3M over 60 years of adult life (age 20 to 80) is $55k/year. That's pretty close to the median American income.
Which … would be exactly what you expect, even though it’s likely inflated a bit - if I buy a house for $400k this year and sell it in ten for $500k and buy another one for $600k did I spend $600k overall or $1m? You could even argue for $500k.
Don't forget that when you sold it for $500k and bought again, you likely paid $40-50k in transaction costs.