We Finally Know How Much It Really Costs To Live The 'American Dream' For A Lifetime

The American dream is a concept that virtually everyone is familiar with. It's deeply ingrained in American culture, and with such global prominence, that cultural identity is both constantly refreshed within the nation and exported beyond it. Globally, people identify with symbols of the American experience, whether it be television characters or the pinstripes and regally curving (and universally reviled in places like Boston and Los Angeles) "NY" of a Yankees cap. The American dream is an integrated feature of the cultural product that we produce and consume, for better or worse.

However, many have noted that the American dream has become financially unattainable, when thinking of its aims in purely economic terms. Today, many people associate the dream with upward mobility and the ability to live life the way they want. These lifestyle aims point to financial stability (and more pressingly, wild financial success) as a key factor in one's ability to achieve the desired outcome. Money Digest previously explored how much the average person spends in a lifetime, arriving at roughly $3.2 million.

However, spending totals and the cost of a lifestyle you hope to bring into reality are two separate things. As such, new reporting from Investopedia sheds light on the financial demands that come with achieving a fully formed economic American dream today, and it's, to say the least, enlightening.

Investopedia's report pegs the typical cost of a fully formed "American dream" at $4.4 million, including action items like a comfortably funded retirement, buying new cars (something you should think twice about in many cases), and owning your own home. This also includes expenses relating to yearly vacations (Investopedia calculates this figure at nearly $180,000 over a lifetime of annual trips), but the tally doesn't take into consideration the essential expenses associated with running a household.

Expenses such as groceries, health care costs, and insurance products (e.g., homeowners insurance and determining if you have enough) are part of a household budget's necessities, but don't feature in the expenses associated with living the American dream. Moreover, Investopedia's findings suggest that these costs have risen above the value that an earner is likely to bring into the home throughout their lifetime, with a total earnings number still hovering in the low three millions. A pair of earners can improve these odds; however, that doesn't take into account the realities of managing a home with young children, which is a component in Investopedia's numbers.

Importantly, with the average family numbering 3.13 people in 2022, the typical modern American family features at least one child. As a part of its research, the outlet estimated a family size that's a little larger, coming out with a price tag of $832,172 to raise two children along with the expenses to put them both through four years of college. This figure is obviously smaller for families with one or no children (here's what it means to be a DINK), but even with a single young one in the home (and no pets), the cost remains at about $4 million for the lifetime expense total, still higher than typical earnings estimates.

Writing for the George W. Bush Institute, University of London professor Sarah Chuchwell notes that historically, the concept of the American dream "represented the idealism of the great American experiment ... something more profound and aspirational than simple material comfort." It's not — although popularly understood to be — intertwined with some marker of economic achievement. The American dream is a cultural phenomenon at its core and it challenges Americans to live up to the morality and standards of the country's better angels. Financial prosperity is absolutely a goal that consumers rightly should prioritize, but the reality is there's more to living the American dream than simply amassing a heap of cash in order to spend it on stuff you largely don't need.

James Truslow Adams, the historian who coined the phrase in 1931 amid the depths of economic disorder and a looming fascist threat in Europe, made clear what this vision of an "American dream" signified. In his book "The Epic of America," he wrote that it's  "not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are."

Attaining all that you're capable of creating for yourself and your family is as wholesomely baked into the American experience as it gets, and it includes time spent with loved ones, lazy days with friends, and so much more. This grounding will help you deliver on that promise for yourself and your family. Equally, creating a strong budget (here's how you can be destroying it, by the way) and routinely reviewing changes in your financial life will allow you the breathing room necessary to ensure you live up to your own version of the dream.