I read a couple of interesting articles this week. One was from the USA Today telling us the Price tag for the American dream: $130K a year. The second was from Joshua Becker of Becoming Minimalist telling us that The American Dream Does Not Cost $130,000/year.
Both articles made good points. From my perspective, I think the number is actually a little low. I would consider that most in society would equate the American Dream to equal a nice house, two nice cars, fun vacations, and enough money left for entertainment and dining out. The intent of the article was to price what it costs to “have it all” or perhaps to “have your cake and eat it too.” That’s what I see most striving for as they attempt to live the American Dream.
In Orlando, Florida, where I live, the house price is right on the money. To live in a good neighborhood, in a good school zone, a nice house of 3 or 4 bedrooms and 2000+ square feet will run you in the $250,000 to $300,000 range. The price outlined in the article includes one new car, but most families I know want to have two new cars, one for mom and one for dad.
I also think they underestimated utilities, at least around here. They estimated $163 per month for electric and gas, and when we owned a house, we were paying between $200 and $450 a month, depending on how much we ran the A/C and the pool pump. I didn’t see the water bill mentioned either, and for us that was another $150 per month. Likewise, I think they underestimated maintenance expenses at 1% of the total ($2750) per year. Most articles I’ve seen recommend closer to 2 or 3 percent. If I’m living the American Dream, I don’t want to mow my own lawn, and that would run $1200 per year, eating up half of their budgeted maintenance expenses. Heck, we had $1000 in Home Depot expenses per year when I was doing my own lawn care.
I would estimate the real cost for living the American Dream in my area closer to $150,000 per year.
That said, I totally get where Joshua was going with his post. His point is that we don’t need all that, and I would agree. In fact, that’s the whole premise for the name of my blog – Rethinking the Dream. We were living a version of the American Dream, albeit at a lower expense level, and we were fed up with it. We had the house and “stuff” side of things, but we weren’t able to have the experience and entertainment side.
I felt like the house was holding us back. The American Dream as it had been sold to me seemed flawed. Perhaps I wasn’t earning enough income to live the American Dream fully. And when you don’t have the income to live it, you have some choices to make. You can live the “stuff” side of the dream or you can live the “experience” side of the dream.
I chose to live the experience side of the dream. I sold my house, purged a majority of my belongings, and downsized to a rental apartment. That makes it possible for us to live a modified version of the American Dream. Our version places a much higher value on doing fun activities than it does on accumulating physical possessions.
By pursuing a minimalist lifestyle I have been able to spend more time with my family and do more of the things I enjoy. And time is something else not mentioned. The American Dream isn’t just expensive in terms of money, it’s also expensive in terms of time. Owning that big house costs you in time. It takes more time at work to earn that big paycheck, it takes more time to maintain, and more time to clean.
I’m very happy with my new direction after Rethinking the Dream.