We've seen how many Americans find it difficult to make it on much more than this, so I was surprised when USA Today said it takes $130,000 to live the American dream.
How did they arrive at this number? Here's the basic premise:
"It's not about getting rich and making a lot of money. It's about security," he said. It's also as much about hope for the next generation as it is about the success of this one. "They want to feel that their children are going to have a better life than they do," said Hirschl.
In their book, the authors write that besides economic security, the American dream includes "finding and pursuing a rewarding career, leading a healthy and personally fulfilling life, and being able to retire in comfort."
With that in mind, USA TODAY added up the estimated costs of living the American dream.
Here's what they got:
- Basics (food, clothing, shelter, etc.): $58,491
- Extras (vacations, entertainment, eating out, etc.): $17,009
- Taxes and Savings: $54,857
- Total: $130,357
A couple other quotes from the piece to round it out:
- It costs a lot less to live the American dream in, say, Indianapolis or Tulsa than it does in metro areas like New York and San Francisco, where housing prices and taxes are sky high.
- Only 16 million U.S. households — around 1 in 8 — earned that much ($130k) in 2013, according to the U.S. Census Bureau.
A few thoughts from me:
- I'm not sure I agree with their definition of the American dream, but if you ask 10 people about it you'll probably get 10 different answers. At least they took a stab at it.
- I'm not sure I'd call $130k a "dream" income, but it certainly is pretty good -- much more than most people make.
- A lot of the expenses seem high. For instance, they list food (not restaurants, those are separate) for a family of four as over $12,000. We spend about $650 a month including food for two teenagers -- not anywhere near the $1k a month they list. I think there may be as much as $20k in fluff costs, so the "real" number could be $110k.
- Got to agree with the "where you live" quote. Maybe that's why the costs look high to me -- I've always lived in relatively low cost areas of the country. It's been a key part of our family being able to save as much as we have.
- Taxes are a killer! Over $32k for them alone!!!
I'm sure many of you will have interesting thoughts on this subject, so I just wanted to get us started and let the conversation flow. I'm looking forward to your comments.