The American Dream

According to the article below  (click on photo), originally appearing in USA Today this past July 4^th, it now takes a household income of about $130,000/year for a family a family of 4 to live “The American Dream.” They estimate that only about 1/8^th of families can do this.

There has been a lot of controversy over that article since then. Minimalist point out that a family can live on much less. Others criticize some of the assumptions on spending that went into those calculations. But the reality is that it is much harder than it used to be.

My step father was the sole income provider for our family. In 1961 he bought a house that cost $78/month (which included taxes and insurance). He couldn’t afford the extra $12/month it would have cost to buy the house he and my mother really wanted. His income was $11,200, so that amounts to about 8.3%. I bought my home in 2000, and I am at 20% of my gross income. I am definitely not in a “dream “ home, and I live on a street that has a huge traffic load that makes it impossible to even sit and talk with someone on the front porch.

Oh yes, and let’s not forget that because of my age and my lay-off at the age of 59, I am forced to work in a western Chicago suburb where I need to pay in excess of $1,000/month to rent a 1 bedroom apartment. In this county the average sale price of a home is $265,000 and the real estate taxes on that home average about $8,500/year.

No doubt you can live on a lot less. In fact that same article showed that if you stripped their assumptions down to the bare essentials, it takes about $58,000. Part of the idea of “The American Dream” is for each generation to have it a little better than their parents did. Fact is that it’s harder now than it was 40 years ago.

There are many things that contribute to the increased difficulty in having it better than the previous generation, but that is another story.

 

The American Dream