You’re familiar with the typical description of the American dream: the 2.5 kids, the house, the white picket fence. 

But these days can anyone actually afford that lifestyle that’s so long been a signifier of middle-class comfort? 

Many Americans are pessimistic about their personal finances and future generations’ economic prospects. Less than half of respondents in a 2022 Gallup poll said they think today’s youth will have a better life than their parents — an 18% decline since 2019. 

Inflation soared to a 40-year high last year, although it’s beginning to cool down, and a housing shortage has made homeownership unaffordable for many. 

We wanted to see the real cost of big-ticket items that represent the American dream in different types of regions throughout the U.S. We took inspiration from a Curbed article that tabulated how much New Yorkers’ dream futures would cost. 

APM Research Lab helped us identify four locations that are representative of different parts of the U.S. We chose a large city, a medium-sized city, a suburban city and a rural city (you can see how we chose each region in the full methodology section listed below).

We included the median income a household makes based on 2021 data from the U.S. Census Bureau, and calculated the monthly amount households make post-tax using SmartAsset’s paycheck calculator. The U.S. Census Bureau defines household income as the “pretax cash income of the householder and all other people 15 years old and older in the household, whether or not they are related to the householder.”

The median sales price for a house was based on May 2023 data from Redfin. We looked at how much you’d have to pay per month for each house in principal and interest using Nerdwallet’s mortgage calculator, and assumed you paid down 20% and had a 30-year fixed-rate mortgage of 6.81% — the average rate for the week ending July 6. 

We also looked at the cost of a car in each of these regions, along with how much you would have to spend raising a 2-year-old child and a 5-year-old.

iSeeCars.com provided Marketplace with the most commonly sold used cars in each city. We looked at iSeeCar’s average price for that car based on a zip code within that region. Then we calculated how much you would have to pay per month for that car in principal and interest using Credit Karma’s auto loan calculator, assuming the person paid down 10% and had a prime credit score and a 60-month loan term. 

To figure out the cost of raising a child, we drew data from a U.S. Department of Agriculture report, which looked at the cost of raising a child in five general regions (e.g. urban Northeast, urban South, urban Midwest, urban West and rural areas).

These expenses, which were in 2015 dollars, included housing, transportation, food, clothing, health care, child care and education, and miscellaneous expenses, such as entertainment and personal care items. 

Because we already looked at the cost of a house and car in each of these regions, we removed housing and transportation from our calculations, then adjusted the final amount to 2023 dollars. 

It’s important to note that in all cases, these price tags represent the median or average, so they do not mean every family is spending this much.

Two personal finance experts joined us to talk about these calculations, and what they say about the state of affordability in the U.S. 

The cost of living in a large city: Fresno, California 

Monthly household income: $3,993 (total median, before tax: $61,250)

Population: 545,567

Monthly house payment: $2,000 (total median sales price for a house: $383,000)

Monthly cost of raising two children: $1,556 (total annual cost: $18,666) 

Monthly car payment:  $421 for a used Honda Civic (total cost of vehicle: $22,686)

Total monthly bill: $3,977

In this large city, nearly all of your income will be going toward these three expenses. People have varying ways to define large cities, but we used New York University’s Furman Center definition, which classifies a large city as having a population of 500,000 or more. 

If you’re making the median household income and need to be able to afford all of the above, it is not feasible to live here, said Stacy Mastrolia, associate professor of accounting at Bucknell University in Pennsylvania. 

“I think large cities have been unaffordable for Americans for years,” added Mastrolia, who’s also the owner of Prof. Stacy, The Money Teacher, a financial coaching business. 

People living with roommates can make do, but big cities can be unaffordable for a lot of families trying to raise kids, she noted. 

Housing is especially more expensive in the state of California, where the median price for a single-family home in March stood at double the cost compared to the national median. Out of all the regions we profiled in this article, the monthly payment for a house was the highest in Fresno, standing at double the cost of housing in a suburban city or a rural area. 

Luke Erickson, a personal finance specialist at the University of Idaho, said there are ways residents have been able to adapt, with some living in multi-generational households. But the high costs have led some people to leave the state. 

The cost of living in a medium-sized city: Sterling Heights, Michigan

Monthly household income: $4,417 (total median, before tax: $69,104)

Population: 132,567

Monthly house payment: $1,553 (total median sales price for a house: $297,500) 

Monthly cost of raising two children: $1,536 ($18,434 annually)

Monthly car payment:  $383 for a used Chevrolet Equinox (total cost of vehicle: $20,631)

Total monthly bill: $3,472

Erickson, who’s also the president of the Idaho Financial Literacy Coalition, said the medium-sized cities he’s familiar with can provide a solid mix of both the city life and rural life. He noted the total median income in Sterling Heights is good, but you will have to pay more for the types of amenities here than you would in a rural area. 

Funding these big-ticket expenses on this salary is still tough, leaving residents with $945 to cover all other expenses, such as health care and groceries for the parents and utilities. 

“The economics in Fresno is families simply can’t afford it. The economics in Sterling Heights is people are living paycheck to paycheck. So they can afford it, but just barely,” Mastrolia said. “They’re one medical emergency away from, one car accident away from financial disaster.” 

A record 38% of Americans reported they or a family member postponed medical treatment for themselves or a family member in 2022 due to cost, according to a recent Gallup poll.  

These financial hardships align with how people are faring in the U.S. overall. The national median income before taxes stands at almost $71,000.

“This is the current situation — the middle class isn’t thriving financially, doing the things that our parents did in terms of working one job or living off of one income,” Mastrolia said. 

The cost of living in a suburban city: Hapeville, Georgia 

Monthly household income: $4,590 (total median, before tax: $72,426) 

Population: 6,575

Monthly house payment: $966 (total median sales price for a house: $185,000)

Monthly cost of raising two children: $1,575 ($18,897 annually)

Monthly car payment:  $335 for a used BMW 3 Series (total cost of vehicle: $18,033)

Total monthly bill: $2,876

“Here, we’ve actually got breathing room,” Mastrolia said. 

After paying for these expenses, you end up with more than $1,700 a month. 

Mastrolia said she thinks the lower cost of living in an area like this is why some families moved from densely populated, expensive areas to cheaper, less populated regions during the pandemic. The rise of remote work for some employees meant they had the flexibility to choose where they wanted to live. 

If your ideal definition of happiness is a standard house, a car, two kids, a dog and a white picket fence, then this suburban Georgia city emerges as the best option out of all the regions — if you’re just looking at the ratio of costs to the median household income, Erickson said. 

“You get this combination of big city money, but then you also get the relatively lower costs you might find in a mid-sized or rural area,” he noted. 

But there might be trade-offs. For example, those who live in a suburban area might have to spend more time commuting if they work in a nearby big city, Erickson said. 

The best option for you will come down to personal taste. Erickson said some people thrive in suburban cities, while others find it restrictive. 

The cost of living in a rural city: Webster, South Dakota 

Monthly household income: $3,141 (total median, before tax: $46,397)

Population: 1,772

Monthly house payment:  $1,018 (total median sales price for a house: $195,000*)

Monthly cost of raising two children: $1,018 ($12,216 annually)

Monthly car payment:  $733 for a used Chevrolet Silverado 1500 (total cost of vehicle: $39,480)

Total monthly bill: $2,769

*According to a Redfin representative, home sales price data from a small city such as Webster “is fairly volatile because one or two sales can lead to big swings in the data.”

This region had the lowest median income out of all the cities we selected. 

“[Webster is] a very working-class city. There are some plants there, some manufacturing facilities,” Mastrolia said. 

In a rural area, you may make less money because there may be fewer economic opportunities. But at the same time, you tend to have relatively lower expenses, Erickson said.

The cost of raising children here is the lowest out of all the cities, while housing here is half the price of Fresno. South Dakota also does not have an individual income tax. 

However, there are some big-ticket items that can still be pricey, like a car. The most commonly sold used car here was a pickup truck, with a monthly bill almost double the cost of a vehicle in other cities. 

“Wherever it’s a more rural area, people consider their pickup trucks a work truck — a necessity,” said Mastrolia, explaining that they may have to haul heavy-duty objects. “It doesn’t surprise me at all that it would have that large of a payment.” 

After deducting the cost of these main expenses from your monthly take-home pay, you end up with $372. 

With this monthly bill and household income, Mastrolia said she thinks this family would struggle to get by. 

Does the American dream still exist? 

Mastrolia said she’s not sure if the American dream exists anymore. “If that is the American dream — two parents, two kids, owning a house somewhere — then the average American family needs to be better employed,” she said. 

While we chose expenses and lifestyle choices that represent the American dream, this doesn’t mean residents in these cities have to or want to spend that amount of money. Perhaps they opt for a cheaper car, they end up renting, or they either have only one child or none at all. 

The definition of happiness or the American dream is also different for each individual, Erickson pointed out. Once you understand your own interests and goals, he said, you can start to figure out how your financial decisions will align with them. 

Methodology

Population figures for Fresno, Sterling Heights and Hapeville were taken from July 2022 estimates from the U.S. Census Bureau. The population figure for Webster was taken from the Census Bureau’s American Community Survey 2021, 5-year data set. 

How we selected these cities

Large city: We defined a large city as having 500,000 residents or more, based on criteria from New York University’s Furman Center. There are 37 cities with a population of at least 500,000 residents, according to U.S. Census Bureau population estimates. We disregarded New York City because this was the region represented in the Curbed article we took inspiration from.  

We ranked these cities by median household income, from highest to lowest. We then chose the city that fell in the “middle” of this list (in other words, the middle median income). That left us with Kansas City, Missouri and Fresno, California. We chose the lower income of the two: Fresno, California. 

Median household income was based on 2021, 1-year data from the Census Bureau’s American Community Survey. 

Medium-sized city:  The Metro Ideas Project, a nonprofit research startup that helps develop policy solutions for issues facing mid-size citiea, defines a medium-sized city as having a population of 75,000 to 500,000. According to the U.S. Census Bureau’s 2022 population estimates, there are 488 cities with this population size, which we ranked by median household income from the ACS’ 2021, 1-year data set. Minneapolis, Minnesota and Sterling Heights, Michigan fell in the middle. Like in the large city category, we selected the option with the lower median household income, Sterling Heights, Michigan.

Suburban city: There is no universally agreed upon definition of suburb. As the Tennessee Department of Health characterizes it, “It’s more of how a place feels connected to a big city and the general land use pattern.  Some suburban areas will feel quite urban while other suburban areas may seem rural.” 

We decided to use data from Jed Kolko, the under secretary for economic affairs at the U.S. Department of Commerce. who compiled a list of counties in the U.S. that are considered high-density suburbs. There were 86 counties in this category, and when ranked by median income, Adams County, Colorado and Fulton County, Georgia fell in the middle. We chose Fulton County, Georgia. To select a city representative of this county, we chose the city with the middle median income, excluding Atlanta (because it’s a major city). While Chattahoochee Hills fell in the middle, it’s described as a rural region, which is why we excluded it and chose the next option: Hapeville, Georgia.  

Median household income was taken from the Census Bureau’s 2021 American Community Survey’s 5-year data set. 

Rural city:  We took a list of the country’s rural counties, as compiled by Jed Kolko, and ranked them by median household income. The two counties in the middle were Starke County, Indiana and Day County, South Dakota. We selected Day County, South Dakota. 

To choose a city or town representative of this county, we chose the region with the middle median income, which was Webster, South Dakota (we disregarded the town of Grenville, South Dakota in this ranking, because it did not have updated ACS data). 

Median household income was taken from the Census Bureau’s 2021 American Community Survey’s 5-year data set.