7 Money Issues That Didn’t Exist 50 Years Ago

Millennial age man looking at a computer that says "debt" in red menacing letters
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The world seems to be changing at a breakneck speed in every way, including financially. With new technology, new philosophies, new challenges, and new opportunities. The United States is vastly different, almost unrecognizable in certain aspects, to America in the 1970s.

Here are seven money issues that exist now that didn’t exist 50 years ago, including student loans, and health care.

Related: 15 U.S. Cities Where A $100,000 Salary Doesn’t Go Far

Credit Card Debt

According to the Federal Reserve, roughly 51% of Americans had a credit card in 1970, versus 79% of Americans who have credit cards in 2020. The increased saturation of credit cardholders also means that less responsible people have their hands on credit. Of the 365 million open credit card accounts in the U.S. in 2019, credit card debt peaked at $930 billion a year, but fell to $820 billion in 2020.

“Americans have a long-standing love affair with their credit cards,” Lauren Anastasio, CFP at SoFi, told Go Banking Rates. “Credit cards have become increasingly popular and the norm for spending money. […] Depending on the type of credit card you have, people are more incentivized today by rewards points that you can cash in for things like travel, airfare or cash back — making it easier to overspend without realizing it.”

Identity Theft

With all of those credit cards out there as well as online bank accounts, it opens the door for identity theft. Approximately 49 million American consumers were victims of identity fraud, which caused a total of about $56 billion in 2020, according to CNBC.

“Identity fraud has evolved and now reflects the lengths criminals will take to directly target consumers in order to steal their personally identifiable information,” said John Buzzard, a lead fraud and security analyst with Javelin Strategy & Research.

Carter Seuthe, CEO of Credit Summit, believes that new technology offers more possibilities for fraud that simply didn’t exist 50 years ago.

“Obviously, these things have existed for as long as people have had bank accounts, but it was much harder to pull off once banks and creditors began requiring multiple forms of ID,” Seuthe said. “Now, an unsafe internet connection can get all of your account information skimmed by someone who invests in $5 of hardware. They can use your identity to open credit accounts, steal money, and commit widespread fraud in a matter of minutes.”

Paige Schaffer, CEO of global identity and cyber protection services at Generali Global Assistance, noted the COVID-19 pandemic offered more opportunity for fraud, “The culture of fraud is clearly shifting. The pandemic has created so many more points of vulnerability for families and businesses.”

Health Care Wasn’t As Expensive

In 1970, health care spending totaled $74.1 billion in 1970, and by 2019 the costs skyrocketed to a whopping $3.8 trillion, according to the Peterson Center on Healthcare. “The cost of healthcare for a hypothetical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $28,256,” according to the Milliman Medical Index.

Health insurance form with calculator and hundred dollar bills next to it
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Student Loan Debt

The average federal student loan debt is $36,510 per borrower in 2022, an increase of 326% since 1970 after adjusting for inflation, the average student loan debt at graduation, according to the Education Data website.

Cost of Living Is Higher

According to the Consumer Price Index calculator for U.S. Bureau of Labor Statistics, $100 in January 1970 is worth $723.72 due to inflation.

CNBC reported, “Prices that producers get for final demand goods and services surged in August at their highest annual rate since at least 2010, the Labor Department.” Adding, “The data comes amid heightened inflation fears fed by supply chain issues, a shortage of various consumer and producer goods and heightened demand related to the Covid-19 pandemic.”

In August of 2021, the core personal consumption expenditures price index (PCE) tied the highest level in roughly 30 years.

Inflation and other factors have caused prices of meat, airline tickets, and used cars to go through the roof.

Jeremy Britton, financial advisor and CFO of BostonCoin, stated, “Fifty years ago, it was reasonable to expect a family to live on just one income (think the Waltons, Brady Bunch or even The Simpsons). Nowadays we tend to have two partners working, and sometimes even a third job or side hustle, just to pay the mortgage or rent and normal household bills. Since the 1970s, the cost of goods and services has simply accelerated faster than wage growth, and income inequality is at its highest levels since before the 1929 Great Depression.”

Real Estate Is More Expensive

The current housing supply is at its lowest level since the 1970s, according to Norada Real Estate. Pushing home prices up 19.1 % from a year ago and notching a record for the largest gain in one year, NPR reports.

As a result of these staggering housing issues, more and more young people are opting to live at home with their parents well into adulthood to save up for a house or rent.

In fact, due to these costs, more and more homeowners are actually regretting buying a house.  

Bank of America Merrill Lynch estimated that only 65,000 starter homes were completed in 2020, which is less than a fifth the number built annually in the late 1970s and early ’80s.

Saving For Retirement

In 1970, the cost to retire was $61,862.40, but by 2019 the cost to retire was a colossal $540,999.90, according to Go Banking Rates. As of 2017, only 32% of retirees had any pension at all, according to CNN Money.

A recent study from Parsons Capital found that the average American millennial has about $166,430 set aside for retirement

That said, The TransAmerica Center for Retirement Studies conducted a new study that paints a different picture of millennial retirement savings.

Although 76% of millennial workers are already saving for retirement, the median household retirement savings for this generation is only around $50,000, which is a significant contrast to the findings of the Parsons Capital study, showing a difference of $115,000. Additionally, millennials have limited emergency savings, with a median of only $3,000.

Despite this, three out of four millennials in the workforce are contributing to 401(k) plans or similar retirement plans when available and also saving outside of work. These individuals typically contribute a median of 15% of their annual income towards their retirement funds.

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