Updated April 30, 2014

Infographic: American Dream Statistics

Catching Up with the American Dream
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With the economy in the hampers, our infographic sorts the facts and aspirations behind the American sense of being.

The American Dream is not so much an entitlement of address; but rather, it is a fusion of national values and personal effort. According to a recent survey by Gallup, 44% of Americans continue to struggle. The infographic below illustrates our American values and aspirations for financial security, home ownership, family, and leisure.

(Click Image to Enlarge)
Infographics: American Dream
Infographics: American Dream © CreditDonkey

According to the U.S. Census Bureau, homeownership is holding steady through the recession at over 65 percent. Meanwhile, half of Americans age 18 to 24 with a high school diploma are presently enrolled in postsecondary education, while as many as 70 percent of graduating high school seniors plan to enroll in 2- or 4-year higher education programs.

Yet, even as these indicators of the American dream suggest a solid foundation, Americans at all income levels are feeling uncertainty, with only 37 percent feeling financially stable. That is not surprising as estimates suggest the recession has reduced household wealth by as much as 20 percent and has halted a median income growth trend that dates back to the postwar 1950s.

"Americans are feeling left behind," said Charles Tran, founder of CreditDonkey. "But the statistics show the American Dream is alive and consumers are the greatest beneficiaries. Even among households below the poverty line, 98.2% of them have television, 64.5% have a washing machine at home, and 50% have computers."

Preliminary data suggests that Americans are working to manage uncertainty by redoubling their efforts to control what they can with good personal financial planning.

Both thoughtful consumer spending and careful investment in the tenets of the American Dream must be part of the family budget.

Determine After-Tax Monthly Income

  • Calculate family or personal monthly income after deducting taxes.

Invest First in the American Dream

  • Plan specific monthly investments in present or future homeownership, a college education for children and retirement security.

    There is no one-size-fits-all American dream investment plan, but the U.S. Department of Commerce in 2010 created middle-class budget templates for middle-range annual incomes—from $50,800 to $122,800—and offered the following guidelines as examples of the range of possible monthly investments for a family of four:

    1. Homeownership: $900-$2,533 per month (excluding taxes)
    2. Out-of-Pocket Health Care/Fitness: $317-425 per month (presuming employer-sponsored health insurance)
    3. Higher Education Savings: $150-$567 per month (presuming some financial aid)
    4. Retirement Savings: $83-$342 per month
  • Set aside an additional amount of money each month in addition to these guidelines for a rainy day cash savings account as a hedge against a job loss or illness. Today, some of the most outspoken personal finance experts are suggesting that building up a cash savings account, that includes the equivalent of six to eight months worth of income, is presently more important than aggressively paying down credit card balances due to economic uncertainty and volatility in the stock market, which makes it more difficult and unwise to access invested savings.

Manage Non-Aspirational Consumer Spending

  • Plan monthly levels of spending on food, utilities, telecommunications (cell phone, cable and wireless service), convenience, comfort, leisure and entertainment.

    The U.S. Department of Commerce middle-class budget templates suggest that non-aspirational spending each month will range from $1,492 to $2,525 for middle-range earners. Out of that total, the U.S. Department of Labor estimates that average families presently spend about $531 a month for food, which should be taken off the top of the available discretionary spending.

  • Use credit cards thoughtfully to manage monthly spending for items that will last more than a year. Spreading expenditures for durable goods—such as the cost of a new washing machine, an energy-efficient refrigerator or living room furniture—across a wider repayment window and paying some interest on these items is not only acceptable, it is wise and a common practice in business. This will help families avoid fluctuations in monthly spending and allow consumers to stick to a budget.

  • Don’t add new expenditures to a rolling credit card balance until you have retired older purchases, keeping the balance and monthly expenditure constant.

  • Never use the category “credit card payment” in your monthly budget. Instead, divide the payment into a list of the durable items you are paying for and their individual cost per month, e.g. “washing machine, $100.” You should also list items such as “restaurant meals” in your budget if these are desirable recurring expenditures for your family. However, include full payment for items such as restaurant meals with your monthly credit card payment and never allow these costs to increase a balance. Some credit cards will help you do this. Some families will choose to carry two credit cards to separate payment plans for large items from monthly costs for which a credit card is merely a convenience.

  • If you use a credit for regular purchases for convenience, investigate rewards programs that offer cash back on purchases at supermarkets, drugstores, gas stations, convenience stores and utilities (such as cable bills) that will allow you to convert regular spending into cash that can be used to boost a rainy day fund.

(Graphic Design by Anita)

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