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:
- Median monthly mortgage payments are $2,209.
- The average monthly payment for a new car is $734 per vehicle
- The average monthly cost of child care is $1,284 per kid.
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.
Invest in real estate without the headache of being a landlord
Imagine owning a portfolio of thousands of well-managed single family rentals or a collection of cutting-edge industrial warehouses. You can now gain access to a $1B portfolio of income-producing real estate assets designed to deliver long-term growth from the comforts of your couch.
The best part? You don’t have to be a millionaire and can start investing in minutes.
Learn MoreDo 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.
This 2 minute move could knock $500/year off your car insurance in 2024
OfficialCarInsurance.com lets you compare quotes from trusted brands, such as Progressive, Allstate and GEICO to make sure you're getting the best deal.
You can switch to a more affordable auto insurance option in 2 minutes by providing some information about yourself and your vehicle and choosing from their tailor-made results. Find offers as low as $29 a month.