Price tag for the American dream: $130K a year

So what parts of the "American Dream" are cut and/or subsidized with debt to fit reality? Median household income is about $50K so there's about a $80K shortfall between the $130K "American Dream" and the $50K "Median American". Assuming $20K of the $80K shortfall are taxes you wouldn't have to pay due to earning $50K instead of $130K, you would still need to cut $60K out of expenses. Looking at the list, the line items most likely to see cuts are:

Housing at $17k per year

Groceries at $13k per year

Car at $11k per year

Medical at $9k per year

Education at $4K per year

Apparel at $2.6K per year

Vacation/Entertainment/Discretionary at $17k per year

Savings/College Investments at $22.5k per year

What's scary is you can completely cut savings, discretionary, and medical (~$50k total) and still need to find another $10k to cut. This is how we end up with people in debt and/or are forced to live without a safety net (no insurance/savings) to fund everyday expenses.

So what's the fix? Tough to say. Near term you're definitely seeing a rise in "sharing economy" type activities to better utilize/monetize assets. Provider gets another revenue stream (to supplement flat/stagnant wages). Consumer gets an end product at an affordable price (since they can't afford it otherwise).

This would be really interesting with some sort of selector to see how the costs and relative balance would change by region/state.

For instance, in the DC area it would be far more - probably nearly double for housing, utilities and education/childcare. Median home price here is $400k, electricity is $0.13+ kWh, daycare is $500-1000/mo, private school is $11-30k+/yr.

Personally, I spend far more than listed in each category above plus taxes and far less on nearly every 'extra' and several 'essentials'.

Also, since a surprising number of people commenting here don't seem to be familiar with the phrase:

http://en.wikipedia.org/wiki/American_Dream

I really appreciate that they pointed out where they got their numbers.

I don't agree with all of them (I don't think that a family of 4 should necesarily own a 4WD SUV which will accentuate gas and insurance costs when 4 door economy car would be fine.

Not sure what the $2,000 a year per child education expense is, seems too small for private school, too big for public school. I couldn't find the referenced USA Today article. Our neighbors' kids who are still going to the public high school spend about $1,500 on various sports costs and other school supplies.

Also food seems a bit steep, a bit over $1,000/month on food? That is like $250 a week. Presumably they eat out a lot?

But the quibbling then boils down to how they are living and where. So that makes it challenging. A family of four that buys annual ski passes every year, eats out for at least four meals a week, has the bread winner buying lunch every day, buys all new clothes to match the latest fashion, doesn't keep any vehicle longer than 4 years, and only buys things "new"? Ok, I could believe $130K.

But then I fall back to what is the point? And then you see it, the entire point:

"Nonetheless, it's clear that though the American dream is still alive, fewer and fewer of us can afford to live it."

And this, I just don't believe at all, although I get how if people do believe this, it works to their advantage. So by and large, not a reasonable article in my opinion.

Keep in mind that there are assumptions made about what the "American Dream" is, driven by cultural representations of what a stereotypical successful American life should be like. It doesn't seem geared toward what the "Average American" life is really like, it's more of a "How do I live like the families on TV?"

Hence the 4WD SUV, owned home, 2 kids and college attendance, etc.

EDIT: Downvote? Am I misrepresenting something?

    "It's not about getting rich and making a lot of money.
     It's about security"

that the American Dream can somehow provide security is its greatest lie. any american that has lived in europe long enough understands what differentiates it from america is how people perceive this issue of social and financial security. europeans expect their socialist structures to provide security. one can see it clearly in the mentality of personal investment. american's, to their credit, live for taking risks to get ahead. whereas europeans avoid it (and save), with the expectation their government is to provide them with such security. a european is more likely to put their money into an obscure insurance than a stock. sure, this risk-averse mentality might might make the place a lot less productive (at least one could argue) but it sure makes it a lot more liveable and safe.

I think it's a good goal to work towards. Second, it's one less thing to worry about. You could easily get by on half of that if your American Dream is different.

As a software developer, I've always dreamt of making enough money, or getting funded to the point where I can make my own software.

Recruiters often remind me that programmers are a dime a dozen, so chasing projects can be frustrating.

My 'workaround' to a lack of funding is to develop my first game (that I designed) on the weekends. The only drawback is it takes a lot longer.

The sweetest advantage to weekend software projects? I can focus on making a game that I know will be fun and sell well. That aspect has always been out of my control for my previous projects, where the focus is creating another's vision of an app or game.

You can check out my apps at bensapps.neocities.org for previous client work.

And in the Bay Area... I'd guess at least $280K a year.

Living where?

$2k for clothes is "essential"? That seems ridiciulous. I probably spend less than 200 a year on clothes.

Also, I disagree with the sentiment that children (2?) are essential.

The American Dream isn't about a price of annual income. The American Dream is about the possibility of having an annual income. Originally American was free which brought on the Enlightenment Period, the Industrial Revolution and allow with it, the concept of making money. The dream is you can make money. This is an important concept to understand back then because making your own money was impossible with the enslavement by kings and variants of Statism. Today American isn't free there is no American dream. Today we are more taxed and more regulated than ever. The concept of making money only exists by having 50% of it redistributed - enjoy.

I think the American Dream has been inflated to mean "the American citizen gets everything s/he wants." hmmm, seems like whining.

Look, the American Dream is about being able to have a reasonable life, keep your family healthy and safe, be a free citizen, and work hard to earn your living.

When did it get to be redefined as "I need a 80 inch TV, XBox, 4-wheel drive car, private education, cellphones, multiple DVRs, 3000 sq ft home, and no taxes and no responsibilities for my expenses, nanny for my kids, golf lessons, soccer, and three cars"?

That attitude of entitlement is what is killing the American Dream, IMHO.

May not fit for Silicon Valley dream though.

Ridiculous Article. All the costs are exaggerated and padded.

I'm becoming increasingly annoyed with this kind of article or political statement.

Look man, we know we're being screwed over. We all do. Why don't you tell us what to do about it? Oh what's that? You don't have an answer...?