I ran into this chart from 1971 the other day. Ruth and I married that year, and we both bought new cars, so it struck a chord with me.
We were in our third year of teaching and making about $7,500 each. It may have been a bit more, but it wasn’t as high as $8,000. Collective bargaining for teachers was a relatively new concept, and what each teacher made was determined by our master agreement with the board of education
My new 1971 Ford Torino ran $3,200 and Ruth’s Ford Pinto was around $2,800. We each purchased our new rides before we married, so there was no discussion of a budget. That came later.
I had purchased a two-unit income property on Kalamazoo’s Stockbridge Avenue in the summer of 1970 for $17,500. I lived in the upper flat, took in a roommate, and rented the lower unit to a brother and sister. The income covered the principal and interest on my mortgage payments. When Ruth and I married, I evicted the brother and sister because of non-payment of rent. Ruth and I moved into the lower unit and rented the upper unit to two girls.
We lived in the Stockbridge house for a couple of years and bought another home on Reycraft Street in Kalamazoo for $19,000. We lived there for three years and sold it for $34,000 when I took the job in Addison. We purchased our home there on Lake LeAnn for $55,000 and I thought we’d reached the mountain top.
Twenty-five years earlier, my parents bought their first home in Royal Oak at 500 N. Edgeworth. When my dad, told his dad, he’d paid $9,900 for the newly constructed two-bedroom home, he was flabbergasted. Grandpa Tebo said, “Tony, you’ll never pay for it.”
Mom and dad did indeed make the $65.00 monthly payments, made some modifications, paid off the house, and my youngest sister owns it now.
As the years passed on, prices rose. Thankfully, our income rose as well. We never purchased more than we could afford, and our lifestyle moved up with the passage of time. We’ve never been rich, but we’ve always been comfortable. Putting three kids through college were the tightest years, but we were able to pull it off. They each had part time jobs to help with personal expenses so Ruth and I could focus on tuition and room and board.
When I was in college, I earned enough money each summer to pay for all of my expenses. I paid less than $1,500 a year for my college education. I didn’t know it at the time, but according to this chart, I probably could have afforded Harvard University. (They wouldn’t have accepted my grade point average, but that’s not the point.) I may have had to take on a few hundred dollars in student loans, but it would have been manageable. That’s not anywhere close to being the case today. According to Google, Harvard’s tuition is over $50,000 a year today. No one’s making that on a summer job.
Back in “71” we paid forty cents for a gallon of gas, but we still carpooled to work to save money. Today’s gas is north of $4.00 but its increase in cost is nothing compared to the increase in the price of the car. Google tells me the average price for a new car today exceeds $47,000. That’s the biggest reason I purchase low mileage used ones. It’s not that we can’t afford a new car, we just don’t see the point.
My twenty-year-old self was definitely trying to impress the girls when I bought my first car, a new 1967 Mustang convertible for $2,700, but my wish to impress is long gone. I’m more focused on getting from point A to point B comfortably and safely.
I looked up my Stockbridge house on Zillow the other day. It’s in a “not so nice” area of Kalamazoo, but they list its value at $117,300, almost exactly $100,000 more than I paid for it. My mom and dad’s 1950 investment of $9,900 on their new home has grown to over $220,000. Our $55,000 Lake LeAnn home is up over $400,000. The prices have fluctuated over the years, but they always land on the “upside”.
By the time my one-year-old grandson, Jackson, and perhaps his teenage cousins, Eva and Brady, purchase their first home, I think most, if not all, financial transactions will be completed electronically. We’re definitely headed that way because you can carry just so many one-hundred-dollar bills in your wallet.
As for me, I need to head to the local store to pick up a few items: Five pounds of sugar – $2.65, a loaf of freshly baked bread – $3.48, a dozen eggs – $2.83, a gallon of milk – $4.06, a pound of coffee – $5.52, a pound of hamburger – $5.14, and last, but not least – a pound of bacon – $8.92.