I ran across some interesting data that had been gleaned from the US Department Of Commerce. Seems like a person can find out how many cans of spam are consumed to how much the median household pays for a pair of
shoes from 1930's to 2009. All these figures are adjusted for inflation. Here is an explanation of what has happened to us from 1970 to 2007 or so. Much of
the discretionary items we Americans spend our money on seems to be less today
than the things we feel we must have. The median family (1 mom 1 dad and 2
kids) spend 32% less on clothes than they would have in 1970, 18% less for
food, 52% for appliances and 34% less to own 1 automobile. I know when I
saw this last item I thought there had to be an error. When I investigated I
discovered that it included payments and everything it took to keep the
automobile on the road. It seems there is much less upkeep to an automobile
today than in 1970. Another important factor is consumers keep their automobile
twice as long today as they did in 1970. Now for the things that cost more.
This explains why it's harder to make ends meet for more people today than in
1970. Americans spend 76% more on home payments today than they did in 1970.
Home payments include interest, closing and home cost. Interest rates are at
historic lows. When one considers how credit scores impact the overall picture one
can understand that some of the 76% increase in home payments may be inflated
due to an estimated 20% of the loans in the US higher by 3% because of low
credit scores. If the estimates are close an extra $500.00 month per loan of 205 of the nation leaves
any local economy and going to the big bank coffers.That
is billions of dollars. It’s costing automobile dealer’s sales. Other
categories that increased are childcare, up 100%, taxes up 25% and insurance up
74%. The median house hold spent 52% more for autos because our median family
went from one vehicle to two vehicles per family. So why are manufactures and
car dealerships in so much trouble? Because cost of categories we think we need
most have increased the most. In 1970 the median family spent half their income
on these same items. Today families spend three fourths their income on the
same things. We've had to go from a one income producer to two per family to
overcome the increases of the household since 1970. Another important fact to
know is the head of household is making $800.00(Inflation adjusted) per year
less today than they made in 1970. Even with the addition of the second income
the family still needed another 25% to keep the household going. So, the
average family borrowed another 15% extra and spent another 10% that the
previous generation put into savings. That's why we may very well be the first
generation of Americans that won't do better than their parents. If we look at
the over-all picture we must figure out how to keep more money at home and
locally. We know we can't get taxes down or the cost of building homes or autos.
That leaves payments. We can lessen the payments on homes, autos and insurance
by making one simple correction on an often over looked item. The credit score.
Auto dealerships are in a great place to help make this happen. Many of the
people that walk into a dealership wanting to buy vehicles can't because of low
credit scores. There are 100 points of errors on 40% of the customers’ reports
that walk into any dealership. Half of those people generally can't buy.
Helping the 40% will eventually help a dealership as well as the local economy.
In just three months average half the low credit score segment of customers can
begin impacting the number of units a dealership posts in sales if the
dealership helps them overcome their problem. Once the pipeline is full of
future buyers the new program begins to pay off and sales numbers reflect the
dealerships shift in thinking. The concept works and has been proven. Go to www.creditcareinc.net
to learn more.