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Money Problems We Didn't Have 50 Years Ago

As children, we couldn’t wait to grow up. But as we grew, many of us might have discovered that adulthood isn’t all it’s cracked up to be! The older we get, the more complicated our lives get—and that includes the area of finances.

When we were kids, it may have seemed like our parents always had their finances together—and no wonder! Things were a lot different a few decades ago. Today, we’re dealing with a new set of financial problems our parents never had to face.

While financial difficulties aren’t new, it seems like money problems have become more complicated over the years. That’s why we need to ensure a healthy financial future for ourselves and generations to come.

Let’s take a look back. Here are seven money problems we didn’t have 50 years ago—and the modern mend for each.

1. Retirement money was guaranteed.

In 1960, 41% of private-sector workers were covered by pension plans.(1) But with retirees living longer than ever and drawing retirement benefits for 20 to 30 years, companies can no longer sustain the pension-plan model. Now, workers are in charge of saving for their golden years.

Modern Mend:

With a 401(k) and a Roth IRA, you’re in control. You get to pick your mutual funds and contribution amounts. We recommend saving at least 15% of your household income in good growth stock mutual funds. This modern mend has a plus side—you don’t have to worry about the company going bankrupt and losing all your money!

2. Identity theft wasn’t an issue.

Pretending to be someone else has been around since Jacob and Esau, but today, it’s on a different scale. If you’ve had an account with Target, Neiman Marcus, Home Depot or eBay in recent years, you may have dealt with identity theft firsthand.

In 2016, 15.4 million consumers lost a total of $16 billion to identity theft. Cases of identity theft that are more complicated to resolve are also on the rise: account takeover fraud, or when someone hacks into an existing online account by stealing the login credentials, went up 31% from 2015 to 2016.(2)

Modern Mend:

Reduce your chances of getting hacked by canceling your credit cards. Protect your bank accounts and other finances with some inexpensive identity theft insurance. Should the worst occur, this insurance takes the hassle out of cleaning up your name.

3. Health care didn’t cost as much.

Fifty years ago, health care spending was already high at $23.3 billion. Now, it’s absurd at an estimated $2.71 trillion in 2015 and growing.(3) So what’s the average family’s cut of that? According to the annual Milliman Medical Index, the typical cost of an employee-sponsored preferred provider organization plan (PPO) for a family of four is $26,944.(4) Just let that sink in.

Modern Mend:

First, save up your full emergency fund: three to six months of expenses. Next, see if you can lower your monthly premium with a higher deductible plan. Just be sure to check with an insurance pro—like one of our endorsed local providers—before you change medical plans.

Finally, take the money you’re saving each month and put it in a Health Savings Account (HSA) to cover deductibles, co-pays, contact lenses or dental appointments. It’s tax-deferred and it gives you a cushion for your out-of-pocket expenses.

4. Credit cards weren’t in our wallets.

Credit cards officially came on the scene in 1950 with the introduction of the Diner’s Club; however, this buy-now-pay-later concept didn’t explode until the late 1970s. Now, the average American has 2.6 credit cards.(5) And of those with credit card debt, the average outstanding balance is $16,883.(6) Yikes.

Modern Mend:

Cut up your credit cards. All of them. Yes, even if you’re the kind of person who usually pays off your balance in full each month. No one is above slipping up. Instead of charging stuff, save up for what you want before you buy it.

5. We didn’t have truckloads of debt.

In the early 1960s, the average American’s debt was less than $4,000.(7) Now, it’s a stunning $137,063!(8) That includes credit cards, mortgages, auto loans and student loans.

Modern Mend:

If you’re in debt, there’s hope! Use the debt snowball method to pay off your debts from smallest to largest. When you start building momentum and your balances begin to shrink, you’ll feel a huge weight leave your life. Once you’re free from debt and other money problems, you’ll be able to use your money for more important things like retirement savings, kids’ college tuition, and charitable giving.

6. The cost of living was a lot lower.

In 1967, the average home price was $22,200.(9) Today, the median home price in the United States is $203,400.(10) That’s a 816% increase over a 50-year period! In other words, things are just plain more expensive these days. Education, housing, food, transportation and medical costs have soared.

Modern Mend:

Cut back on big expenses to counteract a high cost of living. For example, if you live in a city where public transportation is a feasible way to get around, get rid of your car. Reduce your rent costs by finding a roommate. Keep up with higher costs by growing your income, either by working hard to earn a raise or bonus, or by taking on a side gig.

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Avoid the traps and manage your money the right way with Financial Peace University

You may even want to change your living situation entirely by relocating to a less expensive city. Certain areas of Tennessee, Texas and Michigan are considered the least expensive places to live in the United States by the Council for Community and Economic Research, making them attractive relocation options for everyone from millennials to retirees.(11)

7. Budgeting was a way of life.

These days, most consumers use plastic cards to spend money willy-nilly. But back in the day, budgeting was a necessity. Without credit cards or debit cards, consumers needed to know exactly how much cash to withdraw during their weekly visit to the bank.

Modern Mend:

Budgeting is still essential. Without a budget, how can you be sure you’re spending wisely, reaching your savings goals and making a dent in your debt?

Give the envelope system a try. Use cash for your day-to-day purchases and you’ll be able to gauge what you can afford—and what you can’t. Plus, paying with cash will make it harder to hand over your hard-earned money for stuff you may not need.

Make Your Money Count

Your success has nothing to do with the generation you were born into. It has everything to do with you. Before you start longing for the financial good old days, remember that your money is what you make of it. It’s in your control. Today.

Deciding to get out of debt is an important step, and it’s the first step. Educating yourself on smarter money habits will help you prepare for the unexpected and save for your future.

You can get out—and stay out—of debt. And with Financial Peace University (FPU), you'll get all the teaching you need to do just that. This nine-lesson course gives you the step-by-step plan for paying off debt, creating a budget, and saving for the future.

Check out FPU, and make your money work for you. 

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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