What she's not reporting on is one aspect that I believe is also a contributing factor to 'Where did you spend the money?' -- credit card interest. Doing a very quick research (today's time is tight), I was not able to find the percentage of gross income between 1972 and 2004. Does anyone have this data?

Healthcare

Higher Education

Debt

Telecommunications and information(cellphones, home internet, TV which used to be free)

(I'm not sure other things like utilities, I don't now if we're talking about inflation-adjusted numbers or not).

She says, the entry level house in the 2000s changed to what used to be the 4th house a family purchased in the 70s, with all the high end items.

This is what I notice has changed.

It was in 2006, I think, that I mentioned here at KV that my dad had earned $22K back in 1973 and that my father-in-law had earned $18K (per my mother-in-law).

Someone here found an on-line "inflation calculator" and reported that my dad's earnings translated into about $103K and my father-in-law's earnings translated into $89K in 2006 dollars, which was and is "good money."

Neither my mom nor my husband's mom worked outside the home.

However, both my husband and I grew up in homes for which our dads had paid approximately one year's household income.

Imagine my surprise when I later bought my first home--a modest two-bedroom condo--and learned my bank would finance up to three or four year's income for my mortgage!

I was single then, so I hesitantly financed two year's income--and I couldn't have afforded a dime more.

The last number I heard for average Knox County household income was still under $50K, so I continue to wonder who the heck buys all these $300K homes for sale in this market!

You know my reputation for frugality, I know, but I remain convinced that too many people of our generation (I'm 53) try to live way, way beyond their means.

And that's a personal decision on their part that has absolutely nothing to do with inflation or the economy more generally.

There's one reason and one reason only that today's UT grad is graduating $25K in debt: They're financing their day-to-day living expenses associated with living on campus, rather than living at home.

Yes, tuition has skyrocketed. Still, the average ACT score at UTK is a 27, so the average UTK student most certainly has a lottery scholarship. Given their relatively high ACT scores, it appears that many UTK students also receive the supplemental lottery scholarship for ACT scores over 29. Furthermore, I read that for this year's class, the average Pell Grant recipient at UTK has a household income of over $70K--relative to that average Knox County household income of under $50K--so we should assume a great many UTK students also receive Pell Grants.

Their tuition costs are virtually free. These students who graduate owing so much money have borrowed to cover their housing and food costs--for years on end.

Why are their parents counseling them to do this? Back in my day, a kid who couldn't afford to live on campus just lived at home with mom and dad.

I have no sympathy whatsoever for the idiot who unnecessarily finances his day-to-day living expenses for four or five years, then graduates whining about how much he owes. Get real.

Do they still require freshmen to live on campus?

Retirement. When 43% of working Americans have less than $10K saved for retirement, they simply can't afford all those "technology expenses." Four cell phones per household and 100+ TV channels are NOT necessities.

So...whatever changes may have occurred in our economy over the last few decades, the more sobering changes have taken place with regard to our "culture of spending."

Yeah, this liberal does, indeed, understand what's meant by "personal responsibility." Let's get on it.

Gone, now.

and when a banker or credit card company is basically telling you, "Look, you can afford this, no big deal,"

Realtor/mortgage broker: "I know it's a little out of your price range, but it's the cheapest we have in this school district."

I am a big fan of E'beth Warren. And have a special interest in personal finance and lots of experience with low-income household finances.

First to Tamara's question about average income and 300K houses. The usual household income is MEDIAN income, the mid-point. If that is still <$50K, then if there were 100,000 households, 50,000 would make 0-50K per year and 50,000 would make from 50K-gazillion per year.

We picked out Knoxville from among several state University towns to save money on dorm expenses for kids in college. Only 1/3 of our rowdy kids went to UT and graduated debt free (a finance major who actually appreciated that fact!)

Government can encourage certain behaviors by offering tax incentives (mortgage interest deduction) for homeowners; earned income credit for working parents; and subsidized mortgage money with low downpayments and loan guarantees to encourage low-income households to become homebuyers. That's when I really saw home prices adjust upward to absorb all that easy credit. And buyers took on bigger loans than they could afford with the government underwriting the risk - hence the bailout when the risk bubble collapsed.

Very interesting lecture.

What I'm saying, Bird, is that I know too many families in my neighborhood earning little more than that "average household income" in Knox County who've stretched themselves beyond their financial limitations--and it's just too easy to blame someone else for their mistakes.

The T family, which includes a stay-at-home mom, bought their $250K home--five times their annual household income--for $2000 down, then promptly financed two new cars at a cost of one more year's income. She told me so. She also told me their family of five doesn't carry any health insurance because it's "too expensive." When they ultimately suffer that medical emergency, they'll get no pity from me.

The F family, another including a stay-at-home mom, has an $80K income (only because Dad works two jobs), yet they had to bail out of their $300K home by selling it for $100K less than the assessed value for taxes. Don't know why Mrs. F continued to pay for four cellphones, 100+ TV channels, and hopped in the car weekly to drive across town for someone paint her toenails, but whatever. Again, no pity.

The K family bought a somewhat more modestly priced home, but spent lavishly on kids' designer clothes/pricey electronics/unnecessary travel, even as they begged a local church to pay their phone and KUB bills (and even as they repeatedly bummed gas money off my family). The church told me so, after they cut off the K family. We cut them off, too. No. Pity.

Two other families in my neighborhood have also bummed gas money off my family in recent years, in spite of their spending on many luxuries my family doesn't spend on.

Then there are my low life relatives, every last one of them bankrupt at least once and all of them enjoying income levels in excess of my own. As they move into their 60's, homeless now and lacking one thin dime in savings and retirement, they're starting to pile in on their grown children (three of them, so far). I decline their frequent invitations to restaurants and nightclubs, though, both because outings that frequent aren't part of my family's budget AND because I really don't share much with them in terms of any of their values.

And those college students? My daughter has now completed four semesters living in a dormitory apartment with three other girls, and every term she has lost roomates who elected to move into apartments.

Now, none of these girls received scholarships adequate to cover even their dorm costs (which, of course, include electric, water/sewer, phone, internet, cable TV, and newspaper), so even when they lived with her they were borrowing the money for their housing.

But each of these four semesters, one or more then moved out of the dorm and began borrowing to cover even higher living expenses in apartments? One of them chose to live alone in a $500/month apartment (incurring all those other associated expenses alone, as well). Surely that one will owe $40,000 at graduation, just for her living expenses!

These days, it's everywhere I turn, it's everyone I know. I have HAD to begin divulging to my own teenaged children what I know about their friends' families, thusly (TRUE stories, every one):

Q: R's family is going to Cancun for Spring Break. Why can't we?
A: R's family is underwater on their mortgage.

Q: T just got a new Wi. When do I get one?
A: T's mom just had her car repossesed.

Q: M got a new ATV last summer. Can I get one, too?
A: M's dad put that $4000 purchase on a credit card. Now their house is in foreclosure.

I can't buy this "it's the government's fault, it's the banks' fault." It's just so contrary to my personal experience out here in the 'burbs.