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Changes in Personal Finance

Spending time with three generations of family (and family who lives in France and Canada, as well as the States) got me thinking about how finance for me (almost 24) is different from when my grandmother (80+) was a young woman in the 40s or my mother (64) was a young woman in the 60s.


Credit is (or was until recently) Universally Available

The first charge card was put out by Western Union in 1941. Then the Diner’s Club came out with one in 1957 and American Express with the first plastic one in 1959. Charge cards were very different from the credit cards of today, as they had to be paid in full at the end of the month or risk fees and cancellation.

Store credit has been around for much longer, but it wasn’t until these charge cards that you could get short-term but recurring loans from an independent company for various purchasing needs.

In the last few years, credit cards have been universally available and a standard way to build a financial/credit history.

Retirement is On Your Own Shoulders

My mother still collects a pension from the University of British Columbia, where she taught for part of the 70s/80s. Investing for retirement is a fairly recent phenomenon.

Advantages: Taking charge of your own retirement means that your retirement is separate from the company. When companies fail, their pensioners financial futures become riskier. And even if the company doesn’t fail, its pension fund may be mismanaged. When you manage your own retirement funds, you risk your own mismanagement but you don’t have to watch someone else screw it up. Ideally, you can also make more than your pension fund would.

Disadvantages: If pensions go according to plan, you should know exactly what you’ll be getting for the rest of your life. It may be less than you might otherwise have, but a set amount you can count on is very tempting.

College is Far More Expensive and Necessary

The cost of college has far out-stripped inflation. At the same time, a bachelor’s degree is now a prerequisite for most good jobs.

My mother (‘s scholarships) paid $6000 for tuition, room, and board in the mid 1960s. This included a maid service and waiters in the dining hall. Adjusted for inflation, it now costs 2.45x as much to go to the same college. Even if I’d wanted to go, it would have been very hard.

[edited to add] My father’s out-of-state tuition + room & board at a state school has increased by 4x adjusted for inflation, though it’s still less now (and then) than the tuition at my mother’s school. Back then, my mother’s school cost 5x what my father’s did. Now her school costs 1.25x my father’s.

And therefore, students are graduating with much more debt than they did before. If I wanted to work my way through this school, it would take me years and years to do so, or I’d have to land a position where I was making $45k/year after taxes plus enough to get me through the summers…without a college degree. While most students I know do work somewhere, they rely on scholarships and loans and college funds to cover most of the costs.

Some Frugal Classics are Out of Date, Others Take on New Forms

The principles haven’t changed, but our disposable consumer society makes some frugal activities less worthwhile now. In many parts of the country, powdered milk costs the same as regular milk. It costs more to replace many things than repair them.

On the other hand, there are lots of coupons and coupon codes available online. You can get used stuff through Freecycle and Craigslist or eBay and pay little or nothing.

Easier to Use and Monitor Your Money

I haven’t set foot in a bank in months. I’ve stopped at the ATMs once or twice (which were only becoming available when my mom was my age), but I do the majority of my transactions in plastic or electronically. My paycheck is deposited directly into my bank account. I use the lovely ING Direct subaccounts to manage my money and have monthly transactions set up to split up my paycheck.

Nowadays, we can pay all our bills online, we can have notices about low balances sent to our phones or even put apps on iPhones to keep tabs on our finances. Banking in the 21st century rarely requires the use of an actual bank, and I love it! It’s much more friendly for those of us who have a hard time getting to a bank because of our working hours.

Your Take

I asked on Twitter for other people’s opinions on what’s changed then to now. Here are some of the responses I got. What other differences can you think of?


maybe the amount of average people in the stock market now. More funds advertising. Used to be more “elite”/institutional only. ? also, probably the shrinking # and type of employer-funded retirement plans. We’re more on our own for that, now.


credit cards. In early 70s divorced women couldn’t get a credit card. Today, 4-yr-olds are pre-approved.


Personal finance is more DIY than it used to be. Retirement, insurance, medical bills, mortgages, college funding also require more research than previously. Frugal tricks, however, are totally rewritten. Grocery coupons last weeks instead of months; powdered milk no longer a bargain … It’s more difficult for students to “work their way through college”; sew your own clothes cost same as storebought clothes …


The technology available to monitor our personal finances. The amount of information available such as Internet and media


I would say that most households today now have two incomes and yet there seems to be more people struggling.


maybe not today, but in recent history, “live within your means” went out the window. i think that was standard back then. availability of credit, ease of acquiring housing made it easy to not have to live within your means. i think we’re headed back in the right direction though and there is a shift toward living more reasonably by many.


biggest change…our generation feels like we deserve everything.


credit is a lot easier to come by, and debt is much more accepted as a way of life now than it was when our parents were young.


Broad acceptance of debt/credit cds as something you just have & even rely on. Unheard of in our (grand)parents’ time, at least.


greed and boundaries. We have a lot more greed and a lot less boundaries.


the biggest change has been a disconnect with earning vs. spending. The sense of want trumps rationality.


drastically easier access to credit, and much higher amounts of it.

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Alan August 24, 2009 at 7:53 am

Your article on this blog is fantastic.
Well done! I’m a big fan of your blog and be sure to keep up the great work.
I plan on returning and linking to your site.
Alan H.

Lorta August 24, 2009 at 12:09 pm

I’m surprised about your mom having had maid service and waiters at college in the ’60s. Where did she go to college? I first went to college in the ’70s. Over the years I’ve taken courses at public and private colleges in NY, Virginia, and Maryland. I also worked at a medical college for about 10 years. In my observations the housing, food, and recreation of college students have gotten progressively less frugal and more upscale over the years.

mrsmicah August 24, 2009 at 12:14 pm

@Lorta St. John’s College in Annapolis. It’s a different sort of college, even today (though w/o maids and the like).

I’d say that if you go back even farther, around the turn of last century perhaps, you’ll find things like that. I believe St. John’s was either retaining or imitating that.

David @ DINKS Finance August 24, 2009 at 6:13 pm

I would agree that it is, for the most part, necessary to go to college. Even if you don’t “learn” a lot in class, the paper gives employeers re-assurance when they think about whether to hire you or not.

I do think college is not in any way necessary for a small business owner, though, but I have seen that it allows you to buy time before facing the “real world.” Most entrepreneurs I know went to college. It gives you a network, connections, time, and information.
.-= David @ DINKS Finance´s last blog ..DINKs Buy NOKIA =-.

Lorta August 24, 2009 at 6:30 pm

I considered applying to St. John’s in the mid 1970s so I’m familiar with its focus on the Great Books. The school may have been retaining other traditions along with its focus on classic books. Another college that might have still had waitresses then is Wellesley. An acquaintance of mine from high school went there, and I heard via the grapevine that there were waitresses at her dorm (!). I think a major factor in the more downscale life of the average college student back then was the first point in your post, the lesser availability of credit.

I have an interesting book out of the library about the experiences of Roger Martin, a past president of Randolph-Macon College, when he enrolled in St. John’s for a semester as a freshman at age 61.

MrsMicah's Mom August 25, 2009 at 5:08 pm

One minor correction: My scholarship paid only the tuition, $3000. My parents paid half the room and board, and my college job and summer savings paid the other half.

Actually, I’m beginning to doubt my memory. It may be that the total fees were $3000, with the tuition scholarship paying $1500, and my parents and I each paying half of the rest. If that’s right, then St. John’s only cost 2.25 times the cost of your father’s college.

Mr. Not the Jet Set August 29, 2009 at 12:04 am

Financing is now considered the norm. People don’t even pay cash for a Big Mac. Basically, we’ve lost our minds.
.-= Mr. Not the Jet Set´s last blog ..Seasonal Recipe: Peaches =-.

Monroe on a Budget August 29, 2009 at 9:09 pm

This was a great idea for a post! I’m glad you found good material.
.-= Monroe on a Budget´s last blog ..Here’s what I got from Angel Food Ministries in August =-.

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