The year 2005 doesn’t seem that long ago, but it has been more than a decade since Gwen Stefani topped the charts with “Hollaback Girl,” Harry Potter hit the big screen with his “Goblet of Fire” and the iPod Nano was the status symbol of choice. Yes, 2005 was the year “NYPD Blue” and “Powerpuff Girls” aired their last episodes, Ted Koppel resigned from “Nightline” and YouTube made its debut.
A lot has happened since then, including the near-apocalyptic economic meltdown triggered by the subprime mortgage crisis. A lot has changed about the way we spend our money, too – some of it directly influenced by our recent Great Recession.
Personal finance site SmartAsset.com analyzed data from the Bureau of Economic Analysis to see how our spending decisions have changed over several categories from 2005 to 2015 and tried to figure out why.
Here’s what they found.
• Internet access. Today, the internet is a way of life for the majority of people (84 percent, according to the Pew Research Center). That reliance on the net shows up in the numbers: Americans spent $103.5 billion on internet access last year, compared to just $35.9 in 2005.
• Motor vehicle lubricants and fluids. This seems like a weird one, but it’s interesting. Consumers increased their spending in this category by 80 percent over the past decade – 80 percent! At the same time, new-car spending has dropped and spending on car parts has increased. The logical conclusion is that more people are working to take care of their older cars and keeping them running instead of trading them in after just a couple of years.
• Foundation, grantmaking and giving services to households. Spending in this category fell during the recession but has bounced back.
• Auto leasing. Spending on leases increased by 68 percent. It suggests people have concerns about long-term financial stability and would rather not make the commitment of buying, SmartAsset said.
• Telephone and fax equipment. Spending on equipment like iPhones and Androids has increased 68 percent since 2005. Fax machines, not so much.
• Prescription drugs. The pharmaceutical industry is enormous and just keeps on growing. Consumers spent 60 percent more on prescriptions drugs last year than in 2005, totalling a whopping $410 billion. And the amount of money spent on drugs is only expected to rise with the country’s aging population and consumers’ increasing life expectancy.
• Landline phone services and long-distance charges. Not surprisingly, spending on these outdated services have dropped 58 percent. Cord-cutting consumers, all-inclusive cell phone plans and apps like Skype and WhatsApp have all but made long-distance charges a thing of the past.
• Veterinary and pet services. We’ve all gone gaga for our pets. It’s no wonder we spent 54 percent more on them last year than we did in 2005.
• Tenant-Occupied Stationary Homes. That’s a fancy name for traditional houses that are not mobile homes. Housing costs have increased, and rent costs have increased highest of all, rising 54 percent to $471.3 billion last year. Many people who would’ve owned before the crisis are now renting.
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