Important Takeaways:
- Why a $100,000 income no longer buys the American Dream in most places
- The American Dream — which for many people involves some combination of owning a home, getting married, having kids and making enough after expenses to save for retirement and spend on leisure — is becoming increasingly expensive.
- “The benchmark of a six-figure salary used to be the gold standard income,” Sabrina Romanoff, a clinical psychologist, told CNBC. “It represented the tipping point of finally earning a disposable income and building savings and spending based on your wants, not just your needs.”
- A new report from GOBankingRates used that framework to analyze how much money a family of two adults and two children would need in each state to own a home, a car and a pet. The report tallied estimated annual essential expenses for such a family and then doubled that figure.
- Using that framework, GoBankingRates found that all 50 states require more than a $100,000 annual income, according to the report, with 38 states needing more than $140,000.
- “Now people making well over six figures are still living paycheck to paycheck,” Romanoff said. “So what used to symbolize financial freedom is now keeping people stressed about making ends meet.”
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Important Takeaways:
- Americans’ cost of living remains a massive headache, even as recession fears fade
- The long-rumored recession has been postponed – or perhaps canceled altogether.
- And yet, hidden behind these boomy-economic indicators, a frustrating reality persists: Life is far too expensive for far too many.
- From the historically unaffordable housing market and budget-breaking day care rates to high car prices, the United States has a cost of living problem many years in the making.
- Parents of young children are making difficult choices to afford child care — or they’re opting to evade it by dropping out of the workforce altogether.
- Parents are also struggling to buy bigger cars to haul around their growing families while simultaneously socking away some money in college savings plans.
- For too many, the American Dream feels like an illusion.
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Important Takeaways:
- The “American Dream” costs about $3.4 million to achieve over the course of a lifetime, from getting married to saving for retirement, according to a recent analysis from financial site Investopedia.
- Meanwhile, median lifetime earnings for the typical U.S. worker stand at $1.7 million, earlier research from the Georgetown University has found.
- Such figures underline the financial pressures that many families face trying to afford a middle-class life as expenses like child care, college tuition and buying a home continue to climb. The Investopedia analysis tallies the average cost of achieving other aspects traditionally associated with the American Dream, such as owning a house and raising two children to age 18.
- Another analysis, from USA Today, found that funding the American Dream costs about $130,000 a year for a family of four. Median household income stands at about $74,450, according to the Census Bureau.
- Here’s how much Investopedia estimates a family must spend to afford some of the hallmarks often associated with the American Dream. Some costs might be lower or higher, depending on a family’s goals.
- Hospital birth, average out-of-pocket costs for people with health care: $5,708
- Wedding and engagement ring: $35,800
- Raising two children to 18 years old: $576,896
- 10 car purchases over a lifetime: $271,330
- One year of college for two kids: $42,080
- Average cost to buy a home, including lifetime mortgage payments: $796,998
- Pets: $67,935
- Health insurance from ages 26-65: $934,752
- Retirement: $715,958
- Funeral costs: $7,848
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Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”
Important Takeaways:
- New cars, once part of the American Dream, now out of reach for many
- Ramirez, 33, and his wife Angelica Castro-Calle really want a new, small SUV with a little space for camping and paddleboarding gear. But despite good jobs in finance and business contracting, the couple’s monthly loan payment would run around $700 for the $35,000 models they are looking at, before dealer markups.
- The problems pushing new cars out of reach are twofold. On the demand side, rising interest rates have made car loans far more costly — the average monthly payment reached $686 in mid-2022, according to data from Edmunds. Last month, it hit $730.
- But even if shoppers can snag a decent interest rate, the supply of cars available for purchase has been trending far more expensive, in part because manufacturers have been funneling resources into souped-up versions of pricey models and cutting back on cheaper options.
- In late April, General Motors announced it would scrap production of its top-selling electric vehicle, the Chevy Bolt, wiping out one of the most affordable EVs in the United States by the end of the year. That continues a longtime trend. In 2017, for example, there were 11 models available on the U.S. market for less than $20,000, according to Cox data. By the end of 2022, there were four. Then, by March 2023, only 2.
- The end result is a widening gap between those who can afford new cars and those who can’t.
- Dealers say manufacturers are lifting prices beyond what customers will go for, in some cases leaving dealers stuck with models they can’t sell. Earlier this spring, White had 76 new vehicles on the lot of her Annapolis, Md., car dealership. At the time, she had no takers on the $88,000 Jeep Wagoneer. The $115,000 Grand Wagoneer? Not budging. Many of her cars cost between $50,000 and $60,000.
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