Instead, using federally reported information from the last 30 years, the authors argue that Americans are actually spending less on things like clothes, food, entertainment and appliances than they were 30 years ago. Surprised? I was. But I couldn't argue with it. I've never really seen solid evidence that supports the idea of overconsumption. Warren and Tyagi did find four areas where families are spending more- much more than they were 30 years ago.
First, home mortgages are much higher than they were. So, you say that homes are much bigger than they used to be. The authors found that the average home size in the 70s was 5.7 rooms. Today, it is 6.1. (I'm not sure this is the best comparison of home sizes- square footage would be better- but homes are not 4 times bigger than they were in the 70s, and the mortgages are.)
Second, Americans have two cars, instead of the one they generally had 30 years ago. I think most would argue that this is not overconsumption, but a necessity, especially if both parents are working.
Third, health insurance costs have risen dramatically. Again, not overconsumption, but a necessity for most families (I would argue for all families, but some don't think they need health insurance).
Finally, education costs have increased rapidly, and will continue to increase from all accounts.
What I found most interesting were the authors' solutions. They believe that having both parents working has hurt middle class families (these are not conservative women with an agenda to push- they both prefer to be working mothers). They argue that a parent staying home actually gives a family a cushion in case one parent loses his or her job. With one parent home, a family is not living on the edge of their earning potential.
Another interesting solution that goes against the conventional wisdom was to allow families to have more choice in the public schools their children attend. Many families feel that they have to buy a barely-affordable home in a decent school district rather than live in a lower-quality school district. As a result, homes in "good" districts have more demand, and therefore become even more expensive. If families weren't assigned a school based solely on their addresses, they would have more flexibility. (I would add that they could homeschool too, but I know this really isn't a feasible option for many families, even with an at-home parent).
Many financial advisors advocate cutting back in as many areas as possible to afford the house in a good district or the needed second car. Again, Warren and Tyagi take a different approach. They suggest instead of buying the barely-affordable house, continue renting until you can afford the house more easily. Don't but the second car unless you can pay for it up front, or within a very short time frame. They don't recommend cutting back on the small expenses, so when unemployment or illness come, there are simple ways to save money.
I thought this book was excellent, and it's sad that many conservatives have dismissed it, when it supports many conservative ideals. It promotes responsibility and giving families a second chance with a better financial principles. Of course I didn't agree with all the findings in the book, or all the solutions, but it was refreshing to see new ideas that really can work. We've used many of these principles in our home for years, and they have worked.