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Why do young people think financial success costs so much?

While some Boomers blame social media for Gen Z's unrealistic estimation of success, the reality is that life has become more expensive — especially during Gen Z's formative years.

In 2020, a household with an annual income of $59,000 could afford a typical U.S. home, according to Zillow. That was below the median income of $66,000. By 2024, however, an income of $106,500 became necessary to afford a house comfortably. That becomes problematic when the average household income is $81,000.

The cost of living is not limited to housing either. For that, let's look at the trappings of a middle-class family with a house, two cars and two kids:

For these three expenses alone, you'd be looking at $4,961. Then you have taxes, insurance, utilities, retirement savings, food, kids' activities, entertainment, student loan payments and, to a lesser extent, vacations to think about. That's just the typical middle-class, no-frills lifestyle.

On the other hand, boomers could afford a college degree without debt before the cost rose by 303%. Homes were more affordable for them too, with less than half of Boomers needing two incomes to become homeowners.

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Do you need $600K to be a financial success?

While Zoomers are right that $100K isn't going to cut it if someone wants to be financially secure, let alone successful, they went a little too far with their estimate. The Census Bureau revealed that households in the top quintile had an income of $165,300 in 2023 while the top 5% of households earned $316,100.

Earning somewhere within this range would certainly provide you with a solid lifestyle. Earning $165,300 annually over a 30-year career would be more than enough to afford the American Dream, which Visual Capitalist estimates at $4,442,050 based on retirement, cars, a wedding, two kids, pets, annual vacations, house and affording your own funeral.

Of course, success is in the eye of the beholder and some people may find they can live comfortably on less. Still, even frugal Americans will find things simply cost more now — so working on increasing income and taking steps to manage money wisely will be important goals for younger generations.

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Christy Bieber Freelance Writer

Christy Bieber a freelance contributor to Moneywise, who has been writing professionally since 2008. She writes about everything related to money management and has been published by NY Post, Fox Business, USA Today, Forbes Advisor, Credible, Credit Karma, and more. She has a JD from UCLA School of Law and a BA in English Media and Communications from the University of Rochester.

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