There is a difference between being able to afford life and affording to keep up with the Joneses.
It’s not because your neighbors do X that you have to do X. You can perfectly do Y and raise your kid to appreciate what he has rather than envy what he doesn’t.
To be fair I think a lot of it is smoke and mirrors tbh. With Instagram and people putting so much emphasis in their life looking a certain way there are way more people willing to go into debt to afford their lifestyle. My siblings have a wardrobe full of luxury items and luxury clothing, honestly there is probably upward of 10k worth of clothes and shoes in their closet, yet they earn minimum wage. But they live rent-free so spend 99% of their salary on such items and clothes.
I on the other end earn 10x their salary but don’t care for brands so wear second hand clothes (non-branded) and drive a second hand car and spend more time at McDonald’s than I am probably allowed to admit.
My brothers aren’t in debt yet because of their habits (they are also in their early 20’s whilst I am in my mid/late 20’s) but they 100% will be if they move out of my mom and don’t know how to budget and try to keep up with their current lifestyle. So I am sure a lot of the people you see are probably struggling to keep up with the life they want to have.
I also think that you saw more of an average lifestyle growing up (I am from your era so had the same childhood based on your post) because having kids young never leads to a wealthy lifestyle and having kids young was the norm still 25 years ago.
Nowadays 25 is considered quite young for having a child still, the average for a first child being much closer to 30 now and 40+ also becoming a very common age at which to have children.
People finish university later, & start as a result earning and having a career later, and therefore their earning potential is just about getting started at 25, making having a child at 25 in our current era much more challenging than having them at 40 unlike 20 years ago.
Also some things that used to be expensive, like traveling, are now much more affordable to the masses, (that’s why more people can afford to go on holidays and nowadays a holiday at home isn’t necessarily cheaper than a holiday abroad) and things that used to be affordable are not much more expensive that it doesn’t always make sense to go there for a cheap meal. McDonald’s being the perfect example of this as I now pay about £12 for a meal at McDonald’s when that’s also the price of a meal in plenty of local restaurants that actually offer a sit down meal. So while I still love McDonald’s and still go often, I personally don’t see it as a cheap option anymore, and so don’t blame parents for taking the kids to an actual restaurant for a meal rather than McDonald’s if the bill will add up to £60 anyway.
I personally feel like sometimes it would cost me way more to try and recreate the childhood I had rather than living the life I have.
(Thinking about my family spending £££ on staycations when I spend half or a quater of that going abroad for the same amount of time etc… or spending way more on gas + parking going to stores to shop and come home with £10 worth of poundland tat when you can order them for cheap online saving on petrol and parking, same with going to the movies paying £££ when now you can almost reproduce the movie experience at home for fairly cheap or cooking from scratch with fresh produce vs buying cheap frozen meals or prepared meals.)