There was a thought-provoking NYT article about luxuries last week that pointed to a 2006 report by the Pew Research center that surveyed Americans on what they considered “necessities” versus “luxuries”. Some things have become more accepted as a necessity over time:
Other things have stayed “needed” on a constant level, like having a car, TV, or clothes washer. I stewed on this over the weekend, because right now I have all 7 of those things listed above. But as recently as 10 years ago, I only had a computer, broadband internet, and a microwave. No car, no washer/dryer, no air conditioning, no dishwasher.
Are any of these really a need? Even if you live somewhere hot, somewhere in the world there are people living in the same conditions without air conditioning. My wife’s grandmother still used a washboard to clean her clothes up until recently. On top of that, each of our needs or wants can be scaled up or down. You may “need” a car for work, but that car can cost $200,000 or $20,000 or $2,000. A house can cost $1,000,000 or $100,000 or less. Even a TV can cost $2,000 or free (you can’t even give away a tube TV these days). You could run your A/C all day long, or set the thermostat to 83 like my dad does.
It would seem that the real decision is more about priorities. Somewhere in those spending priorities is saving for a rainy day, or saving for retirement. Some people are effectively making the decision that they want to live in a 3,000 sf house instead of a 1,500 sf house than, rather than stop working period 5 years early (or work part-time instead of full-time for 10 years). Is that wrong? I don’t necessarily think so, if that’s their choice. In the end I couldn’t think of any easy answers, but hopefully we start making our choices more consciously rather than just going along with others.
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I would love to see the 2011 numbers, though I wouldn’t expect them to be *that* different. I find the microwave numbers most surprising. I gave mine up many years ago (put it in the basement for a year, just in case I’d miss it) and never missed it like I thought I might. I just heat leftovers in pots n pans and it maybe takes a minute more. More counterspace (yes, yes I know they mount them over the stove now) and no “willys” about potential adverse health effects. I’ve also done away with the TV…and cable and satellite. Though I do rely on my home computer for Hulu and Amazon instant video.
Is that “car” or “Car A/C”? Because I’d vote a car way more important, though still not a *necessity*…how many people live without one? though it may be one if you don’t live in a city. Car A/C is handy here in the desert…but not critical. Like power windows. 😉
Definitely thought provoking…of course we could all do without any of these, even those deemed necessities…as many people do every day. But as you point out, it’s a matter of priorities. As always!
The thing that jumps out … the items that did not even exist in the ’70’s and 80’s … there is the home computer (included in the study), but also mobile phone, internet access, etc. How could they be necessities now when they did not exist 30 years ago? Then again, everything on the list did not exist at one time. Also… how many people living “below the poverty level” still find these items “necessities”? Thought provoking indeed.
If you want to be hard core, probably a necessity is “something required to keep one alive”. By that standard, a house/apartment may not be a necessity. Food, water and a way to maintain acceptable body temperature are just about it.
Perhaps a more realistic definition is something that, say, 60% of more of the population deem “necessary”. Different populations/cultures will, of course, have different standards. But the bottom line is that really it’s a matter of priorities. Things considered a pure luxury by someone subsisiting may be considered an absolute necessity by someone making seven figures. It’s all relative.
I have all these, but I would remove dishwasher, cable tv, and home AC from my necessity list. I can live without those things. 🙂
I enjoy your blog a lot and I almost always agree with you!
However…
Historically speaking, what we would consider the middle class has not done laundry themselves, by hand. They have either had servants or sent laundry out to be done professionally (e.g. Chinese laundries). As having servants became more expensive (we didn’t used to have to pay for their Social Security, there are now better jobs available for working poor, etc.) and as appliances became less expensive, we have shifted to doing laundry at home with an automatic laundry machine. So as these alternatives became less attractive, having a laundry machine become a necessity. But the luxury of having stuff done by another person vs. by yourself, I don’t see this as a scale-up of needs vs wants, really.
Furthermore, I like the analysis that Elizabeth Warren has done (in the past) where she demonstrated that consumer goods like iPhones are really not making much of a difference in people’s overall financial health, because other things like clothes are so much less expensive than they used to be (so it balances out). Think of people wearing suits and hats to work every day vs. our made in China duds of today. What she demonstrated really the difference in people’s finances are the big ticket items like health care, education, and housing.
Sorry for the rant, love the site though! Made my first in-bank I Bond purchase today using your step by step guidance.
@Caitlin – Long time no comment! It’s interesting you bring up microwaves, blogger Freeby50 just did an experiment and found it uses less energy to heat up water via microwave than via electric kettle:
http://www.freeby50.com/2011/10/does-it-cost-more-to-use-kettle-or.html
Not sure how this would work out for those with gas. I am in support of minimizing kitchen gadgets though, even though I am mysteriously into them.
Yes, the chart shown is for car a/c, not cars. Cars are have a ~90% necessity rate.
@Warren – That’s a good question regarding how this would break down by income. I actually don’t think it would change all that much, but that’s just my guess.
@Heather – I agree that healthcare, housing, and education are the biggies. Housing is the one that I think people are getting used to bigger and bigger houses if you compare to families from the 50s. Both healthcare and education costs are likely to reach some sort of breaking point soon, as even the government can’t afford Medicare much longer.
McMansions do get a lot of bad press, but I live in a tiny house from the 20’s and there are some amazing building materials that would be absurdly expensive today. So I don’t think size alone can attribute the increase in home prices. The Case-Shiller house price index is normalized for square footage and inflation, and shows that since the 50’s have doubled even with the recent downturn. But yes I think you’re right about education and health care reaching peaks. And the basic point of your article about re-evaluating your spending priorities is a very good one. But it bothers me that pundits imply that poor people are buying big screen tv’s and so really, what’s the point in fixing health care or making education more affordable, if you know what I mean.
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Sounds like finding the balance that works best for you wether its following in the path of Mr. ERE Jacob, or the middle road, or buying all luxury and working until 75.
The iPhone has made quite an impact on my financial health. Apple stock is up over 300% since its introduction.
You know what you get in South Florida without the AC running at around 78? Mold. You know what is almost impossible to get rid of in a home? Mold.
I’ve also read in numerous places that dishwashers use less water than washing dishes by hand (although, I have seen a way or two around that statistic).
We also work longer hours. I already work around 70-80 hours per week. If I had to wash everything by hand as well, I think there may be some serious problems.
When I bought a house, I probably could do away with cloth dryers and dry the clothes on cloth lines in the back yard when the weather permits and hopefully the neighborhood permits. I somehow think using the dryer shortens the life of fabrics. It is much more difficult living in an apartment not using the dryer though.
Interesting… I currently live without home ac, car ac, a dishwasher… and until quite recently, no dryer. We have a dryer rack (thanks, Amish!), which works quite well, but inevitably limits how many loads you can do (one per day is more or less the limit). Having a dryer is convenient (not necessary).
A few years ago, we even lived without heat for over a month during an October-November time period, because we couldn’t afford to get the boiler fixed right away without putting it on a credit card (which we refused to do). Most days, it was in the low 50s in the house, though it dipped below that at night… We managed. When we got really cold, we’d bake something, and hang out in the kitchen.
You can put up with a lot if you just toughen up and deal with it. We all spoil ourselves — with ac, heat, tv, internet… There’s nothing wrong with it, but as Jonathan says, be conscious of the fact that those things are luxuries.
Part of this is just progress. 200 years ago we didn’t consider indoor plumbing to be a necessity.
I think that another factor is that the cost of these things are getting lower relative to incomes. 40 years ago you’d spend a months pay to buy a dishwasher dryer and clothes washer and today its a week’s wages.
And of course part of it is unnecessary lifestyle inflation. Nobody ‘needs’ cable TV.
Some of these necessities are just replacements for obsolete ones, so I’m not sure that the argument is valid. For example how many people would find an electric typewriter a ‘necessity’ today? In the 70’s, many would have. This has been replaced by a $600 home computer-today’s replacement necessity-and one that is cheaper.
I’ve got quite a few thoughts about this.
I generally take pride in knowing the definition of needs versus wants. Food, shelter, clothing is all I really need. I often am mindful and thankful for luxuries like hot showers (certainly not a NEED). BUT, it’s kind of funny reading this post because I don’t know if the dishwasher ever crossed my mind in the want versus need debate. Clearly I can open my eyes more – there are things I have just always had and take for granted. (& cost so little to keep/use that they don’t cross my mind – maybe largely to the point).
There was some article or study rather recently about how many poor people do have A/C, dishwashers, etc. – the same demographic that didn’t ages ago. It was some crazy right wing spin about how the *poor* have it so good these days. It was obvious to me that it’s hard not to have this stuff in this day and age, and how low cost some of the items mentioned were. I think it mentioned like VCRs. Like who can’t find a flipping VCR for nothing? We hand down our old computers to more needy relatives all the time. This stuff is just readily available.
The A/C debate I kind of get into online a lot. Probably with people who live in climated where A/C is not necessity. I’d personally prefer my house were not 110 degrees in the summer, so we live, our pets live, and our stuff doesn’t melt/get ruined. 😀 I am sure there are people in the world who do survive without AC, but also don’t have to worry about mold (as mentioned earlier), etc. I am sure many others are also dead of heat stroke. BUT, that said, we are not from the area and we are content to set the thermostat to 80 degrees all summer. Back home we just sweated it out because it rarely got hot. No A/C. Anyway, I would say that most the locals do set their thermostats to something like 70 degrees day and night. It’s ridiculous. I literally just wear sweaters/pants all year round because the only place I am going to swelter is outside. In my house I de-robe a bit. In my car, in the stores, at work, and at my friends’ homes, it’s freaking COLD in the summer. So I agree there is a lot of over-use, in cases where A/C may be a bit of a necessity.
The internet? I remember life before internet. We easily make enough money through the internet, save enough money, etc. to make it more than worthwhile – without even talking about the convenience and ease it brings to life. From reading this blog I might have made $4000 in credit card rewards this year – case in point. My spouse just got a lead on an online job. Certainly there are things we don’t *need* but make life infinitely easier and more fruitful.
“but hopefully we start making our choices more consciously rather than just going along with others.” – AMEN to that.
For a family, a dishwaher, washer, dryer, would all be necessities as they save tons of time. Airconditioning/heating depends on where you live: I use neither when the temperature is in the 70s. One item missing here is high speed cable. That is right next to electricity these days. It does save a lot of time as well. Remember those long lines at the bank: now its just a click.