In much of America, a car is necessary if you want to get anywhere. And so, while I've seen various figures, it appears that roughly 9 in 10 American households own cars. Since they are necessary, and expensive, I imagined that transportation would consume a larger share of the budgets of lower-income families than upper-income families.
This assumption turns out to be wrong. According to this analysis at Forbes, families in the bottom 20% of the income distribution spend 14.7% of their budgets on transportation. Families in the top 20% spend 17.4%. The explanation? As you earn more, the kinds of cars (and the quantity of them) that you find acceptable changes. You start thinking, "Hey, I can afford new cars," or "It's really annoying to share a car with my teenager." And next thing you know, money that could be used for other things winds up in the transportation category. Indeed, as income rises, it takes more and better cars for many of us to avoid feeling like we're getting a bad deal.
Wikipedia defines the hedonic treadmill like this: "As a person makes more money, expectations and desires rise in tandem, which results in no permanent gain in happiness." You see this in various categories. The rich and poor spend nearly identical percentages of their incomes on clothing. That first luxury handbag is delicious. The second? Less so.
But is the hedonic treadmill inevitable? And what does it mean for how we raise our children? This is a question I'm pondering as I work on my money book. I don't own a car, so I've actually been thinking about these questions in light of a much more simple item: the Ziploc bag.
We brown-bagged it at school most days when I was growing up, which means that my family went through a lot of sandwich bags. We usually had the nameless kind that you either fold over or secure with a twist tie. I didn't think much about it, until the summer of 2006, when new airport security measures required us to put our carry-on toiletries in Ziploc bags.
Have you ever pondered how wonderful Ziploc bags are? The plastic is nice and thick. You can see what's in there, but the zip closure keeps everything in place — even loose items like Cheerios. Anyway, I was hooked. I started taking big handfuls from those piles they'd give away in airports for people who forgot their baggies. I would hoard and re-use them.
And then, about a year ago, it occurred to me: I could buy Ziploc bags.
The first time I pulled a package off the shelf, and paid $2 or so more for them than the generic, non-zip ones, it felt terribly decadent. This summer, we bought a whole case of hundreds from Costco. Every time I pull one out to pack our snacks for weekend outings, I get a little thrill.
But here's the question: how long will I feel this thrill? I am guessing that, 10 years from now, I won't be that excited about Ziploc bags anymore. You can try to step off the hedonic treadmill by reminding yourself how excited Ziploc bags one made you, and I will certainly try, but this requires battling a pretty fundamental human tendency. And here's an even more important question: how can I make my sons feel excited by Ziploc bags? They will never have known life without them. I am not about to get rid of them just to engineer some faux deprivation. But because I am not, I change their expectations.
I am researching what people have found about these questions, and I'd love to hear from you all, too. Which items made you happy when you first got them? And how long did that happiness last? Do your children take these things for granted? What do you do about that?
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