The American Dream Does Not Cost $130,000/year


Recently, USA Today published a report estimating the American Dream now costs $130,000/year to attain. You can find the entire article and figures here: Price tag for the American dream: $130K a year

Based on these figures, only 1 out of 8 American families are living the dream. Yours truly would be excluded.

To compute the numbers, the author determined first to define the American Dream. Based on surveys and interviews, the American Dream became defined as “economic security, finding and pursuing a rewarding career, leading a healthy and personally fulfilling life, being able to retire in comfort, and opportunity for their children to live a better life.” All good things.

With this as the goal, the actual cost of the American Dream was parsed into several broad categories:

  • The Essentials (housing, food, transportation, medical, utilities): $58,491
  • Extras (vacation, entertainment, eating out, communications): $17,009
  • Taxes/Savings (taxes, college savings, retirements): $54,857

Yearly income required for security, health, fulfillment, comfortable retirement, and opportunity for your offspring? $130,357

The article has continued to grow in popularity since its publication on Friday. It has been shared via social media thousands of times and has been reprinted in countless publications around the world: Detroit, Seattle, New OrleansGreat Britain, just to name a few.

This is unfortunate. Not only because the article is untrue, but because it is harmful.

For starters, consider the math. The notion that a family of four must own a $275K home, drive an SUV, spend $5K on summer vacation, and eat $315 worth of food every week is foolishness. The presumption that security and fulfillment and happiness can only be found in the ownership of these luxuries is a shameful misrepresentation of our heart’s greatest desires. I know countless people who live fulfilled and content lives on far less—all the while planning on a comfortable retirement and providing opportunity for their children.

Nevertheless, it is not the math that worries me so much and prompted this public response. Instead, it is the unintended (or maybe intended) consequence of this article. And my only hope is that these words will find their way into the minds of those who need to read them.

The bold proclamation that an annual income of $130K is required for the American Dream carries with it serious consequences:

It breeds discontent. 7 out of 8 American families are being told their lives would be more fulfilling if they had more money. As a result, our standards become redefined. While we may have been living a perfectly content life with far less annual income, we are forced to reconsider the possibility that we may be missing the really good life—and even worse, that we may never fully attain it.

It breeds jealousy and envy. 7 out of 8 American families are left out of the American Dream, left only to wish and dream it could be theirs. Soon, comparison begins to settle in our minds. The presence of bigger houses, faster cars, and corner offices become more apparent than ever before. And we begin to ask ourselves, “Why do they get to live the American Dream and not us?” Jealousy has taken root.

It breeds resentment. When jealousy and envy take hold of a heart, resentment is soon to follow. Not only do we wish we had what they had, but we soon become bitter towards those who have more. And whether we are in the 87.5% or the 99%, resentment will always steal more joy from us than it will from the other person.

The American Dream does not require $130K/year. To claim that it does, is to grow discontent, jealousy, and resentment in many American families. Indeed, this article harms us as individuals.

And it harms us as a nation because it is based on a faulty definition of the American Dream.

Every summer, we celebrate Independence Day in America. Towns and Cities all across our great Republic are united in their celebration: 250 years ago, our forefathers stood up against what they believed to be unfair laws and unfair taxation without representation.

These are the words they chose to boldly declare their independence on July 4th, 1776:

We hold these truths to be self-evident: that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness—that to secure these rights, Governments are instituted among Men.

This, then, is the American Dream. It always has been and must continue to be so: that each of us would be allowed to experience life, liberty, and the pursuit of happiness. And government would not stand in the way of these pursuits.

As Americans, we are free to pursue our own happiness—however we decide to define it—in whatever lawful manner we desire. And those of us who have chosen to define happiness and security apart from $250K mortgages and SUVs in the garage are free to do so. Because there are greater and more important pursuits available to us than material possessions.

This is the American Dream. And it costs far less than $130K/year.

Joshua Becker

About Joshua Becker

Writer. Inspiring others to live more by owning less.
Bestselling author of Simplify & Clutterfree with Kids.

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  1. Elizabeth says

    What really IS the “American dream”? Why is it so important for some families to “keep up with the Joneses”? I think the American dream is just like any other dream: it’s personal. What’s a dream for one family could be a nightmare for another family. I live in a very affluent So. Calif. beach city and we’ve lived here for over 20yrs. Seeing our city change over the years has been hard: the old surfers die-off or are bought out, the trust-fund kids move in and bulldoze any house that has under 3 bathrooms and 2 kitchens….I AM NOT KIDDING! Our family’s only extravagance is our children and their education. Our newest vehicle is 10yrs old. I am the help: the maid, the gardener, sometimes the plumber. If families STOPPED looking over their fence to compare what they think their neighbors have, we’d all be better off! Less consumer debt, less worry, less envy=more happiness! Look inside your family and figure out what YOUR American Dream is, don’t let someone else select it for you.

    • erika says

      So glad you wrote this. I live in Manhattan beach and it sounds like you are close. :-) I grew up in the Midwest and have had quite an adjustment since I moved to so cal 15 Years ago. Rejecting the status quo here is hard and comparison breeds contempt. I am happy and grateful…even if others would deem my house a tear down. Haha

    • Terri says

      “What we think they have” What a wonderful way to put it. It is not easy to compare our own happiness and success on the perceived happjness and success of our neighbors.

      Sure, the family next door could have a beautiful wife, perfect kids, a big house, the newest cars. But what if ther “happiness” comes with a strained and loveless marriage, a workaholic father who drinks at night, a depress despondent mom, a daughter who cuts, and a son who acts out because negative attention is better than none. They could have 3 mortgages on the house to pay for the new cars and the pool. They may be in default on the second mortgage and in danger of losing it all.

      Sure looks happy…..

      I am content with no debt, living in our modest mobile home in the country, cuddling with my dogs and husband at night.

    • Nadine says

      You nailed it. We just upgraded to a 1700sq foot ranch for our family of 5 and I’m happier than a pig in slop. It will be our forever home. It’s enough. I know people that have homes twice as big and exude nothing but negative vibes. No thanks!

  2. says

    Unbelievable. Just un-***ing-believable.

    This is the first I heard about the “American Dream costs $130K” article.

    Beyond speechless, I’m pissed off.

    Such BS knocks people down like they’re Nancy Kerrigan.

    Good on you, Joshua, for the follow-up.

    Note to self: write a comparative cost post for other countries. Knock a zero or two off that “American Dream” price. :)

  3. Confused says

    I’m very confused. The author of this article is basically saying that because people’s feelings would be hurt, the article detailing the American dream by USA today must be wrong.

    Guess what. It’s a dream. People dream of the lottery and it won’t happen for anyone but an extremely tiny percentage ( more like you will be stuck by lightning) but people still play. A dream by nature is somewhat unattainable or else we wouldn’t call it a dream.

    • Jen says

      You Americans are more brain washed than the Russians ever were. Land of the free. American dream. What utter BS. So people in other countries are not free? Don’t have dreams? Look through the propaganda people. It is made by the ones who stand to benefit from it. The rest of the suckers buy the BS and willingy ruin themselves trying to fill their pockets. Open your eyes and see your country for what it is. No health care for every body and no free education. Rich and advanced country…..yeah sure!!!! That is not the definition of prosperous and advanced in Europe. Free to drive a car everywhere or forced to drive a car everywhere because of crappy public transport. Open your eyes Americans. Travel and see for yourself. Don’t let them pull the wool over your eyes. Think, how free are you to choose really. What are your choices? Time to wake up USA.

  4. Gaylene says

    Totally agree with you, Josh. The article does nothing but promote discontentment to those of us that don’t begin to make that much $$ but have a wonderful fulfilled life! Again, our joy doesn’t come from things!

  5. says

    Extras (vacation, entertainment, eating out, communications): $17,009

    Holy … With that budget, I’m sure your living the dream! LOL

    Seriously, I went fishing with my GF in this unbelievably beautyfull river a few miles out of the city, cost me 7$ of fuel, 3$ of fish-hook, and I brought back for at least 25$ of fish.

    I had a great time and the fish was delicious.

    The mass media try so hard to brain wash everybody to believe that happiness is something that you have to buy.

    Great post!

  6. Mary says

    Many people are living well without having the purportedly required $130K in annual income but if they want more and their incomes will not permit them to afford more, what are they likely to do? I think some will buy those things anyway, and borrow the money to do so. I do not recall, but did that article mention $10K in credit card debt as part of the so-called American Dream??

  7. says

    I see lots of evidence of people striving for the American Dream laid out in the _USA Today_ article. So many families, who have plenty of money coming in, still have both parents working in order to buy all the stuff and/or to maintain some sort of image.

    I reckon a lot of those families are in debt as well… basically chasing their tails.

    Of course we all have free will. But social pressures can be tough to ignore. I believe it’s really important that we choose who we listen to and hang out with.

    Your article is spot-on. Thank you.

  8. says

    While I agree that most of this is ridiculous, the housing cost outlined in the article doesn’t seem far off to me. Utilities costs alone can often add up to over $400/month in some places. I live in an area where a winter heating bill can run $500-600 or more. That’s almost half of the $1400/month cost outlined. That’s not *just* a mortgage payment. It’s everything related to housing costs, including maintenance if you own the home.

    Around here, taxes and insurance could run you $200-500+/month in some towns, add in a mortgage payment that amounts to a few hundred a month and all your maintenance and utility costs, and you could pretty easily hit that $1400/month number without owning anything even close to resembling a $275k home.

    Even if you rent, it adds up quick. Rent for a 2 bedroom apartment in my area can run $700-$800/month without utilities. Add in the utilities and you’re looking at $1200/month.

    The grocery budget is the one that really strikes me as funny in the USA Today article. I eat mostly organic, high-quality foods and my grocery bill rarely exceeds $50/week (it’s usually closer to $35). Even if I quadrupled that to fit a family of 4, it’s still nowhere near what the “American dream” calls for.

  9. says

    I was just telling a friend at lunch today that I have fallen out of love with the American Dream. Or at least the current definition of it. I want far more for my children and grandchildren than what that dream has to offer.

  10. Angela says

    Grateful for your blog in response to this article. It is unfortunate and sad that so many people cling to money as happiness. Certainly, money is necessary to provide some basic needs. However, by no means is the the epitome of what happiness brings.

    Family, friends, love, community, self awareness…just a few of the things that bring true happiness. Just hearing the concept ‘American Dream’ creates a ill feeling in my stomach. It is not the American dream that I want. It is the love I receive from family, friends, community and my own self-awareness and self consciousness that I want.

    Thank you for your response to the article.

  11. Martha says

    I never have and never will have that amount of annual income. Put two kids through college, no student loans as a single mom, no public assistance and loved every minute of it. I am now retired, live conservatively but lack for nothing. This estimate is inaccurate from my point of view.

  12. Brian H says

    I generally agree with this article, although it certain parts of this country a $275k residence is very basic and also it is very difficult to eat on less than $300 a week if you try to shop for healthy food, especially of the organic kind. Those numbers probably are pretty accurate. I totally agree with all the other so called ‘requirements’ that you must spend money on in order to be perceived as ‘livin’ the dream’. Total materialism. Not for me. To each their own.

  13. Martha Evans says

    I would have to agree. My husband and I make far far less and have two children. We are very happy and contented. We have a bit of a struggle every now and then, but we are truly happy. I wouldn’t Chang my life. We work hard, maybe harder then the next guy. In the end we appreciate what we where working for even more. My american dream is to have a happy healthy safe family. Living were we can walk down the street and not be worried that something may happen to our children. Living in a place were I can send my kids to school and know they are safe and learning. Thank you for your article:)

  14. Nan says

    I also agree that the housing costs are pretty accurate. Any house in the northeast outside of a major metro area is going to cost that much plus high taxes, high home heating oil and fuel oil. Rents for a one bedroom are almost the size of a mortgage payment.

    We try to live a minimalist lifestyle because it appeals to us and because the high cost of living requires it too! We have a child with a serious chronic illness and we need our good medical coverage that my husband’s job provides.

    Our daughter is in a state university with a good scholarship and has taken the federal loans offered and still half our paychecks go to her tuition so she doesn’t come out with a grand in loans! Our house is paid off last year but we have taken just 2 vacations in the last 30 years.

    I think the harm in this article is that it infers people are so into stuff and living an expensive lifestyle that they have enormous debt and maybe that is true for some. But we find the basic cost of living so high we can just meet our needs. Happily we don’t want the luxuries.

  15. Jennifer says

    I very much do like a lot of things about minimalism. I have always strongly valued freedom and experiences over things, so I consider myself to be minimalist with respect to possessions too! But, I have to say that I don’t like this article. Specifically, I disagree with the writer that the USA today article is bad because it “breeds discontent.” First, people are either content with their lives or they are not. A short article publishing some numbers is simply information that we thankfully all have the freedom to read and do with as we please. So I don’t like the writer’s paternalistic tone or his suggestion that the public cannot emotionally handle some basic facts about how much things can reasonably cost in America. Second, if someone reads the USA T article and suddenly feels very upset, I think they should be allowed to, and should not be judged for wanting more in their lives. Wages for most in this country are depressingly low, at a time when companies are reporting record profits and the stock market is booming, and that’s just not right. People should be free to feel mad when they are being treated unfairly, and when they are upset, they should speak up about it. In contrast to this writer, I hope people read this article, get mad, and call their congressmen.

    • Linda says

      So glad to see someone with some common sense comment! I was getting angry while i continued to read this article. If you are jealous of some who has a corner office then you should talk to them and figure out how they got there and then maybe you can get your own corner office!

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  17. Andrew says

    The American dream is not that specific. The American dream is this: When you live in another country with little freedom (because the government does not allow you to reap the fruits of your labor) you come to live in America where you have the ability to be successful, whatever you dream you have the freedom to do it.

    • Em says

      I’m the only one in my family that’s not upset about living below the “poverty line”.

      they are all busy trying to get loans and save up 22K for brand new car when I can get the same one on craigslist for 1K.

      I really think most of this ‘american dream’ is all about showing off to the neighbors and not about actually enjoying yourself.

  18. Kelley says

    I’m a little surprised at the author’s condescending attitude towards $250k mortgages. Here in California, most house prices start at $400k, even for a modest home. A $250k house would be a steal.

    • joshua becker says

      Thanks for the comment. I did certainly not intend to sound condescending. And I don’t think I ever singled out mortgages in the article above.

    • Jan says

      That’s precisely why we left California, where I was born and raised. We now live in North Carolina with a much lower cost of living and where natural beauty abounds and is free for everyone to enjoy.

  19. says

    Thank you for this excellent, thoughtful and absolutely true post and for clarifying what the American Dream actually is. All of your points about the results of this crazy thinking that the American Dream simply equals materialism are on target. Great post and great perspective.

  20. says

    I live in England (not London) very happily on the equivalent of $22,000 net. Debt free, dont drive, embarking on a more minimalist lifestyle, I eat well, sleep soundly at night and worked all my life. Life is experience not schedules, bank loans, 4x4s and the accumulation of material possessions. “Keeping up with the Jones” and The “American Dream” is a dream people need to wake up from. Life is what happens when you are not fighting in the queues on black Friday for a cheap tv that more than likely involved some form of child labour in China during it’s production.

    • Tom says

      Great article. Why? It seemed to get a lot of people thinking about life, values and money and how to manage the three. Great to hear from those who are doing well, regardless of income. For those who are hung up on the $130k, get over it and learn from the others.


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