As FirstBank celebrates 60 years of “banking for good,” we’re looking back at our inception date, 1963. In the same year, Martin Luther King Jr. gave his famous “I Have a Dream” speech, and President John F. Kennedy was assassinated. While the culture has changed drastically, rising costs and inflation have made 1963 feel worlds apart.

On the heels of the COVID-19 pandemic, the inflation rate in 2022 reached a staggering 8.5%, the highest rate since 1982. As the rate seems to be trending down in 2023, Forbes projects the Fed could come close to its 2% inflation goal by mid-2023.

As we take a look back in time, the inflation rate in 1960 was a mere 1.36%. Even though the costs of goods and services in the 1960s were different, we’re still budgeting and saving to cover the same bottom line.

What is Inflation?

While inflation makes its way into everyday conversations surrounding gas and egg prices, what does it really mean? The Inflation rate in the United States is based on the Consumer Price Index (CPI), which reports the price consumers pay for products and services.

So how much more expensive are your average costs?

Forever Home

According to Zillow’s Home Values Index, the average cost per home in the United States is up 10.8% since last year. See cost comparisons of a home today vs. the 1960s. This means, the value of homes has risen an astounding 905%.

• 2022-23: $357,319
• 1960: $11,900

How to Afford Your Future Home:

While the homebuying process can seem overwhelming, it doesn’t have to be. Here are five easy steps to help you afford your future home.

• Check Your Credit Score
  • You can request one free credit report annually at AnnualCreditReport.com
  • Use caution when obtaining a credit report as it may lower your credit score
• Determine How Much You Can Afford
• Get Your Down Payment and Closing Costs Together
• Find a Lender and Get Pre-qualified

To learn more about your path to owning a home, visit our Financial Literacy and Empowering Homeownership pages at efirstbank.com.

Higher Education

As many Millennials and Gen-Zers toil with the rising costs of college, sticker prices for tuition and fees have impacted their decisions.

According to Collegeboard.org, the average annual tuition/fees for 2022-23 full-time college students are:

• Public in-state: $23,250
• Public out-of-state: $40,550
• Public technical/trade: $13,470
• Private nonprofit: $51,690

On the contrary, the average cost of college tuition for full-time undergrad students during the 1963-1964 school year was $1,248 for tuition, fees, room, and board.

How to Afford Your College Tuition:

It’s Never Too Late to Apply for Scholarships:

• Use online tools like bold.org or scholarships.com to find scholarships based on your family background, hobbies, academics, and more. Don’t stop once you receive grants or scholarships. Continue to search and apply throughout your college career to take advantage of free money designated for school-related expenses.

Enroll in Community College Courses:

• If you’re working full-time or have other personal commitments, your local community college typically offers courses at a lower rate than a four-year college. Just because you start at a community college doesn’t mean you’re stuck there. You can study at your leisure and transfer to a school that accepts your earned credits.

Consider More Affordable College Housing:

• Dorm life isn’t for everyone, especially when it inflates your annual tuition. Finding alternatives from off-campus living –like staying at home or shacking up with roommates– can trim room and board costs, setting you up for financial success after graduation.

Open a College Savings Account*:

• A College Savings Account (CSA) is a valuable tool to help you save money for college. The CollegeInvest Smart Choice CSA** or 529 account is the only FDIC-insured college savings account. If this option is right for you, visit efirstbank.com for more information.

Dream Car  

According to J.D. Power, the average price of a brand-new vehicle in December 2022 was $46,382, whereas the average vehicle purchase in 1963 would cost about $3,000.

How to Afford Your Dream Car:

Shopping around for affordable interest rates is necessary when making car payments on a brand-new or used vehicle. It’s also essential to make decisions based on practicality versus luxury. Though driving around that brand-new Mercedes Benz may be exciting, you must consider the monthly payment and how that will affect your finances. Also, considering the blue book value may be necessary when looking towards a future trade-in or resale value.

Airline Ticket 

In the ‘golden age’ of air travel, flying was exclusive and relatively luxurious because it was so expensive; the average cost for a roundtrip ticket from Dallas Fort-Worth would cost around $48. While that seems affordable today, a $48 ticket in 1963 converts to about $467 in 2022 with inflation. However, after the Airline Deregulation Act of 1978, airfare became increasingly cheaper and more affordable.

According to Forbes.com, the average roundtrip ticket cost in 2022 was $234. Because flying is now more affordable, more people can travel.

How to Afford Your Future Vacation:

In today’s digital world, thousands of websites and apps like Hopper or Priceline help consolidate airline pricing and help track discounts when they arise. If you’re planning a trip ahead of time, don’t purchase the first flight you come across. Take your time and search for the most affordable ticket with the help of these online tools. Discover more ways to help navigate airline costs and better budget for your vacation here.

Morning Cup of Coffee

We’re all aware of just how costly a cup of Starbucks or Dunkin’ Donuts coffee is, but thanks to the infamous treat yo’ self-attitude, society has made room in the budget for that expense. Depending on where you live in the region, the average price of coffee can range anywhere from $1.38 to $3.46.

However, according to Yahoo! Finance, the average price of coffee in 1963 was a mere $0.35. Though it may not have had all the bells and whistles of a caramel Frappuccino, it still got the job done.

How to Afford Your Cup of Coffee:

Though coffee brewed at home may not taste the same, it will help you save and fight the rising costs of your morning cup. According to a recent U.S. survey, 14.4% of respondents reported spending more than $40 a month in coffee shops, making it an annual $480 out of their budget dedicated to take away coffee. Without sacrificing flavor but cutting costs, there are various publications like Bon Appetit that have curated some of the best ways to make coffee at home.

While there are no hard and fast rules to avoid rising costs, we strive to provide tools and resources that help you afford life. For more saving, budgeting or homeownership tips, subscribe to Smart Cents at efirstbankblog.com.

*Consumer fee schedule

**Withdrawals made before maturity on the 1-Year Time Savings CSA are subject to an early withdrawal penalty. A reminder notice is sent ten days prior to maturity. You will have a 10-day grace period after the account matures to withdraw from or close the account without penalty. If you do not instruct is otherwise, the account will automatically renew at maturity.

If you or your designated beneficiary is a resident of a state other than Colorado, you may still be eligible to receive tax benefits. However, you should check with your home state to see if it offers a 529 program. That program may offer state tax or other benefits to residents of that state that may not be available to investors in programs in other states.  

CollegeInvest, the CollegeInvest logo, and the CollegeInvest Smart Choice College Savings Account are registered trademarks, administered and issued by CollegeInvest.

To be eligible to apply for this account, you must be a U.S. citizen or U.S. resident alien.

Learn more about our College Savings partner, CollegeInvest.

For more details, see the Plan Disclosure Statement.

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