Are Americans Being Priced Out Of The "Dream"?

The word pivot has become a buzzword that many (including myself) have used obsessively throughout the pandemic. But in regards to how the economy has shifted, the word pivot has some context. Oftentimes when we mention that word, it means to scale up - but in a sense, the pivot within the economy has “turned on” the pricing out of Americans for the dream that has been marketed to us for as long as we can remember.?Inflation has sapped 40% of Americans of their pandemic savings, making consumer spending even more reliant on the job market per Santander .

I was reading an article recommended to me on Threads; it was from The Atlantic calling out how some feel that “It will never be a good time to buy a house”. I mean throughout the pandemic that sentiment has been seen throughout the news: “Interest rates at all-time highs”, "Home sales surge in 10 cities”, “Rising insurance rates could make home-buying less affordable” – the list goes on. But some people are truly wondering when is a good time to buy a home, let alone would they be able to buy a home.? When I saw I get it, I get it. Not only does the cost to purchase a home seem daunting, but the upkeep cost (many don’t talk about that part much) is another feat. The rent vs buy commentary is just subjective as to how much money is enough money to survive or even retire - comfortably.

When it comes to renting, it’s an interesting mix bag. Some rent has grown beyond budgets pushing more people into poverty and homelessness. While 89% of Americans renting a two-bedroom property find it now cheaper than buying a comparable property. Three years ago the figure was 16%. It all plays into the market, budget, and company/landlord.

But that loops around to so many other cost of living sectors - Americans were sold the American Dream. The term "American Dream" was coined over a century ago, ranging from real estate to retirement. While the real estate industry appropriated the term to convince people to buy their own homes, over the years many Americans are finding it hard to live that dream due to it being deferred by the current pulse of the economy. It’s not just the housing market that seems to be pricing us out of the picket fence and ease - it’s other areas too. 92% of Americans are cutting back on their overall spending in some way, per CNBC.

While many are discussing whether to rent or buy, the costs of things like renting, healthcare, insurance, college, and just regular things are becoming even more expensive to just - live. The notion of inflation is cooling off and seeing the pricing out, confirms to me that inflation or that soft landing is a facade to how finances are showing up for consumers’ wallets. 57% of Americans cannot come up with $1,000 if they have an emergency.

Not only does being priced out impact consumers' financial pockets but also their mental pockets. Americans say they need $284,167 per year to be happy, with men’s estimates much higher than women's ($381k and $183k,? respectively) via the folks over at Empower. So the saying that “money can’t buy happiness” needs to not only transfer that money into my bank account but restructure that saying due to the current economy. Many people are doing well enough to maintain, but a lot of people are struggling. I don’t care what the headlines say.?

Headlines Got It Wrong -

Seeing headlines also saying that consumers are overspending is one thing, but not calling out how some are being priced out of things due to inflation, debt and the math not math-ing. Yes, I continue to say it’s not all math-ing, but until it’s realized in your budgeting ratios - I’m going to keep talking about it. But one of the theories about the current state of the economy is the traditional dream being deferred or heavily delayed making us rethink our dreams. 74% of Americans say they are stressed about finances, per CNBC.

The ‘this or that’ of how people talk about when it comes to spending, saving and the cost of living is something that should become more blended to be more understood. I’ve been questioning on platforms that while many are citing that inflation is softening, the connection to the “who” is experiencing that softening needs to be seen. The latest CPI report (that tracks how much we spent the month before on core goods and services) always calls out how we’ve dipped in costs, but in reality, we are spending more. The segments of the report don’t hold weight to how much they have to spend just to live life - even remotely comfortably.?

The goalpost keeps moving that looks like the picket fence in the American Dream, not just for Millennials like myself but in some way for every snazzy title you can give to each generation. The average cost of living is outpriced by what Americans bring in from income - no matter if it’s a paycheck, social security, tuition refund check, or any way from us to bring in money. There are even those who work and get paid amazingly well ( in retrospect of the economy), but they are finding themselves having to live in their car. The amount of people who are working poor/homeless is surprising to experience. According to the National Coalition for the Homeless, 40–60% of people experiencing homelessness in the United States are employed. This article followed some who are working and homeless.?

The Economy Got A Rebrand - Involuntarily

The theory of “paycheck to paycheck” is also shifting as many more and finding themselves “priced out” of living the American Dream. What was the income thought about that was well under $40K, as we see reports of how the cost of living is increasing, those making $100K are feeling the same impact or close to those who make less than half that they do. This isn’t the rebrand that the economy needs right now when it comes to people being able to continue to dream of what financial freedom looks like for them. 25% of America’s “regular rich” — defined as those who make at least $175,000 a year — consider themselves either “very poor,” “poor,”? or “getting by but things are tight," per Bloomberg.

The percent of people living paycheck to paycheck based on their salary:

$100k- $149k: 51%

$150k - $199k: 47%

$200k - $249k: 41%

Over $250k: 36%

Again, all of this is subjective to the market, budget/expenses, and life costs. The theory of “paycheck to paycheck”, makes the American Dream have a different “REM” of experience by the income/budget.

From housing (buying a home, renting) to buying a reliable car to being able to afford to go to the doctor, not having to rely on resources to feed them, or being able to have electricity - let’s not even forget education… the priced out reality that is showing up no matter what the reports show by talking heads that are out of touch.?

What could be done to rectify this new normal in the economy??

• Consideration of what Universal Basic Income/UBI could look like in various ways.??
• ?Corporations and organizations started to shift not only how much employees are paid (more) but also giving them resources to help them learn more about how to keep the money they have. Also retirement.?
• The cost of living goes down and is more fair-based.?
• Opportunities being more all is a thing done vs just said?
• Financial literacy is more than people knowing more about money, but having the opportunities to expand their means.?
• The gig economy is paid more profit sharing to survive.?
• In the same way, the government is going after Ticketmaster for fees, we see other companies that are predatory while impacting consumers' wallets are held in the same regard.?

The list could go on, but I am happy to know that despite the economy looking interesting - Americans are starting to find ways to dream their dreams besides being priced out of which could become a nightmare that they feel they can’t reach. What are some ways you are dreaming your new financial dream in 2024 and beyond??

This might be part 2! Stay tuned!