Giving up coffee to balance the books: how many lattes to financial freedom? | Money | theguardian.com: "...The latest to take on the challenge of convincing Americans of the reality of their financial lives is Joseph N Cohen, an assistant professor of sociology at Queens College. In a paper released this past weekend at the American Sociological Association's annual meeting in New York City, Cohen used figures from the Bureau of Labor Statistics to bust the myth of the latte factor: the idea that we're wasting our precious funds on pointless luxuries.
Cohen found that we're not spending more on things we don't need to get through the day. On the contrary, we're spending less. Between the mid-1980s and the mid-00s, Americans' spending on clothes fell by 28%; alcohol 12%; tobacco 25%; vehicle purchases 15% and vehicle maintenance 24%. Overall expenditures on food also declined, with spending on in-home meals falling by 8% and restaurant dining by a more modest 3%.
Where did the money go? Consider your own circumstances, and you're likely to see the most common increases in spending. During the same period of time, we spent almost 20% more on housing and 32% more on healthcare, which includes a more than 100% rise in the cost of health insurance and 41% of pharmaceuticals. Education? An astonishing 60% increase. Gas went up by 23% and auto insurance by 29%.
Cohen summed it up aptly:
...""A colleague of mine once told me that America is a place where the luxuries are cheap but the necessities expensive. A cell phone is affordable. What's killing people is housing and childcare and medical expenses."
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