The Cost

A family of four in the US pays an average of $135,000 a year on necessities and taxes.

The median income for a family of four in America is $125,000. 

Somehow our leaders do not see the fact that the average income for American families is less than the average expenses for American families as THE major problem facing this country. 

We do.

So let’s get boring and talk expenses! If we are to reduce the cost of the American Dream, we have to start lowering those costs. Here’s the top expenses that families face:

Most families spend 30% of their after tax income on housing though in some cities and states it could average closer to 35%.  That's $30,000 per year in expenses for the average family of four in the United States.

Federal income tax averages around 14.5% of income for families but that's not the only tax they face.  They also have property taxes and state and local taxes plus FICA.  All totaled the average American family pays about 20% of their income in taxes.  That's $25,000 per year.

Ugh.  This is not only insurance but deductibles and copays or, if you are one of the millions of Americans that can't afford insurance, it's the direct cost of the care.  The average family in the United States pays 20% of their income for healthcare ($25,000/yr) and it is going up so Republicans can give billionaires a tax break.

The cost of college has skyrocketed in the past thirty years.  To pay for college for two kids, the average family of four in the United States has to save between $7000 and $24,000 every single year from the birth of their child until they reach college.  That's 6-19% of a family's average income.  Oh, and unemployment rates for new college grads is currently around 10%.  

For families with children that wish to become artisans or tradespeople, a trades education can cost up to $20,000.  For two kids, that $40,000.

This includes fuel, insurance, train, airplane, and bus tickets as well as the payments and maintenance on a vehicle.  The average American family pays 16% of their income for transportation ($20,000/yr).

Food accounts for 11% of a family's budget, childcare another 6%.  That's another $21,000 per year.

The American Dream is to live comfortably with enough money to not only save for a rainy day but to also buy a second home, own a boat, take a yearly vacation, splurge on a man cave or a fancy coat.  A family of four should have enough income that after paying for all the necessities above they can also save 20% of their income and have an additional 30% as disposable income.  That's the American Dream.  Right now it costs $235,000 annually and only 1 in 10 Americans can afford it.