Probably I'm telling you something you already know, but if you put money into the stock market during most of the last 12 years, it hasn't done well. It's even worse if you bought a larger house thinking it would be a good investment and you could get some money out when you needed it.
I'm not sure how people saved for big expenses or retirement prior to the 1970's. I've heard stories of people putting money in jars and storing them in the basement.
When I started saving in the 80's, that approach seemed so antiquated. The inflation in the 70's would have cut the value of those basement
dollars to less than half. In the modern, swinging 80's, you'd take your savings and buy a newfangled Certificate of Deposit (CD) or open a money market account.
Also in the 80's, it became clear that you were missing a huge opportunity if you didn't get into the stock market. The same in the 90's. The Dow soared 230% in the 80's and another 320% in the 90's.
Two decades is long enough to erase the old patterns of savings and entrench new ones. So everyone with some extra cash was buying stocks or mutual funds, either directly or as IRAs or 401Ks.
As the markets became less reliable after 2000, investment advisers talked about "dollar averaging," which meant that you kept investing in stocks even when you were leery, because the ups and downs would average out and the overall trend was still up. I and many others listened to this advice. However, by dollar averaging, I probably would have done better putting my money in a mattress or in jars in the basement.
The point isn't that my money didn't grow. It's that we lost the idea of putting away enough money to tide us through. Instead, we were supposed to invest, and let our investments keep paying us back many times over.
With this mindset, we didn't need to save as much. We could spend more, we could borrow, we could buy a more expensive home and enjoy more expensive hobbies. Thrift was passe. Well, we were wrong. Now we have to relearn those old lessons of savings and thrift, as individuals, as families, and as a country. I hope we can do it.