Money—it’s something that most of us are short on. It is the
means by which we can gain things that we need and want. What amazes me is how
prices of things have gone up so much over the years. I often wonder how folks
manage to pay for the items they buy.
During my sophomore year in college, the old ’54 Chevy gave
up the ghost and died in the dorm
parking lot. My older brother talked to my
mother to convince her to borrow money to buy me a car. I selected a Volkswagen
Beetle. It was brand-spanking new. The cost for that vehicle was $2600. Excited
to own a new car but embarrassed that I had to ask my mother to purchase it, I
drove that Bug off the lot.
Today, the cheapest model of the VW Beetle averages $19,995.
That equates to an increase in price of almost 8 times what the car cost back
then. Yeah, I get that these are different times and that cars are much nicer
than they were; however, the fact remains that a Beetle is still a Beetle. I
watch men who are mad with desire for trucks plunk down $40-50,000 to own them.
They finance the things for 7 years, which is much longer than the life of most
heavily used vehicles.
Amy and I bought a house after we’d been married a couple of
years. It was one built by the vocational building trades class at Doyle High
School. We bid $32,000 for a house that had a living room, kitchen and eating
area, three bedrooms, two bathrooms, and a half-basement.
A couple of years later, we built a house in Ball Camp. It
had two bedrooms, two bathrooms, a large living room and kitchen, eating area,
garage, deck, and screened porch on a one-acre lot. We finagled our finances to
afford this $36,000 house. The $241.00 a month payment came with 9% interest. It
also included escrow for mortgage insurance and taxes. We tightened our belts
and did without some things to be able to afford this house. In fact, we still
live there, although the place has undergone two additions and renovations over
the years.
At the present time, the median listing price for a house in
Knoxville is $185,000, and the price per square foot for construction is $114.
That means for a 2400 square foot house, the size of my residence, a person
would pay $266,400. For a 30-year loan with a 3.92% fixed rate, the payment for
the house would be $777.31. That doesn’t
include taxes and mortgage insurance. The
payments alone equal $9400 a year, only $600 more than I made each year when we built our home.
Surprisingly, the cost for renting an apartment isn’t much
better these days. Amy and I rented a three-bedroom house for $125 a month
before building our house. The average rent in Knoxville in 2015 was $723. How
in the world do families find enough money to pay for a place to live? Things worsen when the cost of utilities is
included. A 915 square foot apartment has an average monthly utility payment of
$145.00. So, just to secure housing costs an individual $11,000 a year.
I could go on about other skyrocketing price for such things
as food and gas, but the costs for vehicles and housing produce enough sticker
shock for me. I suppose folks must be raking in huge hunks of money these days.
If not, they are treading water fast just to keep their heads above the
currents of debt. I don’t see how a young family makes it, and I worry that
prices in the future will only go higher. Sure the wealthy won’t have problems
with cash but we who are middle class are that lucky. So, my question, once
again, is how do folks afford those things?
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