On a recent hike, a friend and I were discussing how difficult it is for families to make ends meet. (The conversation really wanders when your brain is a bit oxygen-deprived.) As baby boomers that grew up in small communities, it didn’t take us long to conclude that times have changed dramatically in the last 40 years or so, and today’s norms have increased the family financial burden.

Before discussing differences in spending that is somewhat discretionary (hence the omission of health care and taxes), a disclaimer is in order. I certainly recognize that many of these changes have real benefits, and I am not making the case that one era is “better” than another. The costs, though, are real.

Housing – The average size of new single-family houses in the United States has more than doubled from 1100 square feet in 1950 to 2340 square feet in 2002 (and even more today). At the same time, the average household size decreased for just over 3.5 members to 2.62. This means the living area per family member has nearly tripled, and the days of siblings sharing rooms seem to be long gone. Special-purpose rooms and “personal space” have become commonplace in many homes. Of course, these larger houses have to be filled with more stuff, and it’s safe to say that the closet and storage space in the average house has increased at least as fast as the overall size.

Much of the routine home upkeep and maintenance that used to be performed by the homeowner, like yard and housework, is now done by hired help. Since “time is money”, this would be fine if the saved time were spent on revenue-generating activities. Unfortunately it is more likely spent in ways that cost rather than save money.

Leisure – A recent Forbes article cited time researchers who asserted that high-wealth industrialized societies drive up the perceived value of time so people seek goal-oriented activities rather than old-fashioned loafing, unorganized play or chores. This perception is reflected in the “over-scheduling” of many children in multiple organized activities, and by parents supporting their kids’ activities while also pursuing their own. These activities all have their own costs, but paradoxically, they haven’t stemmed the growing tide of obesity.

Here are a few simple examples of how the changes in how we spend our free time impact our pocketbooks. Americans spend 2.6 times as much today on dining outside the home as they did in 1970, in constant dollars. And the number of passengers on multi-day cruises, which used to be viewed as a real luxury, grew from 500,000 in 1970 to over 9 million in 2004.

Cars – Considering improvements in comfort, safety and other features, today’s cars are probably less expensive, adjusted for inflation. The big difference is in the number of vehicles and miles driven. The ratio of all cars and trucks in use to registered drivers increased from .78 in 1970 to 1.17 in 2003, a jump of 50%. And not only did the total miles driven increase 150% over the same period, but the average miles per vehicle also grew by 42%. More cars and more miles overwhelm any improvements in mileage and translate to much greater cost.

Media and communications – This is probably the most obvious change. Not long ago the available choices were free broadcast TV, free broadcast radio, standard telephone service and standard format music. Long distance calls were artificially expensive to subsidize local phone service, but people actually wrote and mailed letters.

Today’s technology has exponentially reduced the cost of individual media and communications interactions. The costs are due to the proliferation and short life cycles of media options and equipment. Subscription services abound, every family member has a cell phone, videogames have a new generation every few years and most homes have multiple entertainment and/or communication devices. “Packaged services” can hold down costs, but the average monthly cable or satellite TV bill alone is well over $40 and the average monthly cell phone bill is pushing $50.

Education – This is certainly not a purely discretionary expense, and the financial value of education is well-proven. But there are a number of ways to pursue education, and those choices can have a huge effect on expenses.

From 1960 to 2000, the enrollment at private elementary and high schools remained roughly the same, but expenditures quadrupled. The number of students in public colleges nearly tripled over the same period and private college students increased 70%. Surprisingly, the price of a college education did not outpace inflation during the 70’s, but since 1981 this cost has increased at more than twice the rate of inflation.

What about the growth in incomes for families? The median family income (adjusted for inflation) grew from $41, 568 in 1970 to $54,061 in 2004, a substantial 30% increase in purchasing power. Were expenses simply increasing at the rate of inflation, families would be better off, but that has clearly not been the case.

While it is certainly possible to eschew all these norms and new technologies and live by the standards of forty years ago, it’s really not practical. How many families have the conviction and discipline to live in smaller quarters, share transportation and forego the convenience and enjoyment of modern media? Even if adults are willing to make these choices, there is an understandable reluctance to impose them on children who would be seen as “different” by their peers. The challenge for families is to set priorities and focus on those expenditures that provide the greatest benefit, regardless of the trends and changing standards. That has always been the toughest part of raising a family.