The USA Today has an article up which tabulates the cost of what they call “the American dream”. I see some opportunities for economizing on expenses, do you?
Nonetheless, it does feel as though things aren’t what they used to be, though I think people have always felt that things aren’t what they used to be. Here are USA Today’s costs; they explain their methodology in the article.
That’s a sadly low college savings rate, if you’re hoping to pass on the American Dream.
Why save for your kids college education? It will only drive up the already ridiculous cost of education.
Make sure you have enough for retirement first.
The standard household with two kids only has one parent (17.5k 401k contribution)? Even if one parent stayed home it would be better to contribute to a ROTH than your children’s education.
Just left a quick comment on there, but that might not have been the best idea since many of the folk seem more than a little loopy… but here is what I can’t understand – Taxes….
If you had a salary of $130K and then deducted the 401k and 529 plans you would be at $107.5k – since this is the american dream we are assuming a nuclear family, with married filing jointly, which would be about $24K in federal – but that is before you pull out the kiddies deductions. The footnote states that they added property, sales, city state etc – but the these don’t add – property, city, state, sales (where there is no state) deduct from Federal taxes paid – so that number is off by quite a margin.
Also on deductions they talk of median housing expenses with a mortgage, but don’t back out the mortgage interest.
As for the rest of the charges – they seem crazy high to me – but maybe I am just naive about them – but over $11K for a SUV, and $9K for medical? Seem very high to me…
For vehicle costs, see here
http://publicaffairsresources.aaa.biz/wp-content/uploads/2014/05/Your-Driving-Costs-2014.pdf
Nice thanks! So that is kinda worst case though right? It shows new car depreciation as $4500 per year plus finance charges of $1000 per year..
I took the Ford Explorer from that list, starting at $30K, and the following Ford based finance options:
0.9 % for 36 months Year 1 interest would be $229
1.9 % for 48 months Year 1 interest would be $453
2.9 % for 60 months Year 1 interest would be $525
4.9 % for 72 months Year 1 interest would be $742
I guess there would be some closing costs etc – but that would only apply to year 1…
I guess you could play this one off as saying the American Dream means a new car every year with zero down… but if you just bought a year old car or even leased then these numbers would be vastly different.
You and I had this discussion last July, and I’m too tired to re-hash it here.
Wow – education (non-college) expenses for two kids are estimated to be $4000? Forget private (even parochial) school being part of the American dream, I suppose. Depending on where you live, public schools are not a viable option for a lot of families if you want your child to get a decent education. My children will attend public elementary, but we will have to look to private options in middle and high school if I want them to get even half of the education that I was lucky enough to receive as a child.
And cost of childcare for kids too young to be in school (or needing school aftercare) isn’t calculated in at all. Childcare costs are my family’s BIGGEST expense other than taxes. More than mortgage, travel, groceries, etc. I guess for the American dream our nanny works for free. 😉