How to Think About Affordability |
"Affordability" is the word grabbing the headlines in public discourse these days.
However, if affordability is a problem, it's important to be clear about what exactly the problem is and what can be done.
Gallup has new polling data noting that the "high cost of living continues to top Americans' list of the most important financial problems facing their families."
Per Gallup's new data, 31% say "high cost of living/inflation" is the most important problem," 13% say energy costs/oil and gas prices, 13% say "cost of owning or renting a home" and 8% say "healthcare costs."
But "cost of living" and "affordability" are not the same thing.
"Cost of living" is just that -- the costs of items purchased for personal and family needs.
But "affordability" is my capability for making these purchases.
A top-of-the-line Mercedes is not affordable for most working Americans. But for Jeff Bezos or Bill Gates it is nothing.
What's important is that my cost of living is not increasing faster than my income -- what I can pay. It is critically important that we are looking at........