With wages not keeping pace with living costs, it is difficult for families to achieve the American Dream lifestyle|sgvisuals|CC BY-NC-ND 2.0
The “American Dream” of owning a home, having a family, raising children and retiring with a financially stable future is becoming more expensive. Previously, a six-figure salary was seen as the “gold standard income,” but not anymore.
A 2023 CNBC survey of 4,300 US adults found that 52% said they needed at least $100,000 per year to feel financially stable. However, around 26% of them said they require a salary between $100,000 and $149,000 a year to feel comfortable.
These financial expectations reflect the cost of living across all 50 states.
A report by GOBankingRates states that to live a middle-class lifestyle, a family of four needs over $100,000/year in every state, with 38 states requiring over $140,000 annually.
Saving is hard
The 50-30-20 budget rule suggests allocating income to essentials, discretionary spending and savings. But with wages not keeping pace with the cost of living, it is difficult for families to achieve this lifestyle.
Debt woes
Economists note that debt, particularly student loans and credit cards, has affected income growth for many.
As of February, Americans have $1 trillion in credit card debt. Student loan debt has also been surging. It reached $1.77 trillion in the first quarter of 2023.
This debt burden leaves even high earners struggling to make ends meet, with some living paycheck to paycheck.