My version of the American dream formed pretty early on. I think the fact that I wanted to be married have a family and own my own home came from my early surrounding and upbringing. I'm the youngest of five children, we always lived in a house, and my parents were married for 50 years before my dad passed away.
Now, us American's don't hold the copyright on dreams. My Canadian and international friends have them too. Although, the American Dream is rooted in the Declaration of Independence, which proclaims that “all men are created equal” with the right to “life, liberty and the pursuit of happiness. So the thought of this type of dream has been embedded with us from the very start.
I know the equality part has been in questions over the last few years, but I'm not here to dig into that today.
What got me thinking about the American dream topic was a recent survey I stumbled across by the Bank of the West, called the 2018 Millennial Study. It focuses on you guessed it the American dream, by asking Millennials, Generation X, and Baby Boomers all types of questions about their dreams, whether there attainable, what ingredients make it, how finances impact it, etc.
When comparing the survey results to my initial American dream, I was missing some key financial details. Sure I wanted a wife, a family, and a home, I just never had a financial education to put it all together in the best way possible. I did it anyway.
American Dream Survey Results
Here are some of the survey's highlights:
Six in ten Millennials believe that the American Dream is attainable today. Top ingredients to the American Dream are: owning a home, becoming debt-free, and retiring comfortably.
I agree. I believe the American dream is still obtainable, and 57% of my fellow Generation Xer's believe that too. Although I believe the definition of what the dream is, has evolved. What I mean by that is I don't think we are pigeonholed to a cookie cutter view of an American dream anymore. There are many, many different versions of it, which could include never getting married, never buying a home or working for a tradition employer.
Owning a home (56%) takes precedence over paying off debt or retiring comfortably for Millennials. In fact, nearly 1 in 3 Millennial homeowners have dipped into retirement funds for down payments.
I was guilty of this, taking a loan from my 401K to help with my down payment for my home. I believe it was $5K because I didn't know any better. This whole stat smells like with a little better financial education we could do a whole lot better here.
68% of Millennial homeowners have regrets about buying a home, wishing they had been more prepared going into the purchase. They cited putting more money down and better inspecting the house as steps they wish they’d taken.
Yes, and Yes. I missed so many little things on my final walk-through of our home, resulting in repairs that cost us money the first week or two in our new home. After a few months, we took out a $25K loan to upgrade the bathrooms.
Millennials have a complicated relationship with debt: while 69% feel they’ve made it when they are debt-free, they also say they’re comfortable carrying debt. They also understand that they need to take on a mortgage to become homeowners and are comfortable with this kind of “rite of passage” debt.
I'm sure student debt plays a role for millennials. It's typically one of the first debts a person may take on. I was comfortable with carrying credit card debt for years. Again, with a better financial education foundation, I believe all generations can do better here.
More Millennials feel confident in their understanding of financial products than Gen Xers and Boomers but are mistrusting of the markets due to having come of age during the financial crisis. In fact, 66% say they feel safest keeping most of their savings out of the market. This may hinder them as they prepare for retirement.
Investing later in life just hurts the ability for compound interest to work its magic. We need to get over this fear of the market. Again I hate to sound like a bit of a broken record, but we need to teach the personal finance basics as an early age, and let individuals decide on their own, but at least with the base knowledge, they have a fighting chance.
What's Your Dream?
I posted this image along with an article back in 2014.
The meme, “Things I Never Learned in High School” I initially found posted by my mother-in-law, who graduated high school 20 years before I did, and I've been out of high school for 30 years now.
A quick survey of my three children and not much has changed in recent years. Yes, some basic banking and some better career/resume skills are taught but not much else.
It struck me odd when reading the Bank of the West 2018 Millennial Study that still some many Millennials, Generation Xers, and Baby Boomers hopes, dreams and fears mostly tie back to their relationship with money.
Now that could be just how a bank worded the questions to the survey they presented, but I have to think there's some truth to it.
Look at the list of “ingredients” in the dreams of those surveyed.
- Owning a home
- Being debt-free
- Retiring comfortably
- Pursuing my passion
- Traveling the world
- Building a satisfying career
- Making a difference
- Building Wealth
- Getting a good education
- Making it on my own
- Getting married
- Having children
- Falling in love
- Owning a car
- Owning pet/s
- Earning a big paycheck
- Being better off than the previous generation
- Working for myself/owning a business
Again, this could be a big Bank talking, but many of those ingredients have to do with money and how we handle it. If we could better prepare ourselves at a young age for life, we'd be better equip to tackle these things in the future.
I'm on board with teaching less Pythagorean Theorem and more life skills like financial literacy in our schools that's no secret. Now does changing how we teach and prepare our youth fix everything? No. It still depends on how we apply it, but it's still worth a try. A guy can dream, can't I?
What's your dream look like? How would your dream be affected if you were better prepared for it? How does your dream line up with the survey results?
Brian is a dad, husband, and an IT professional by trade. A Personal Finance Blogger since 2013 who, with his family, has successfully paid off over $100K worth of consumer debt. I want my three children to handle money better than I ever did at a young age. I have been teaching them as much as I can for the last 10 years. My goal is to continue to champion the financial literacy message and then why I created the “How To Rock Your Money” book. To help teenagers navigate their financial futures. I hope my family’s story of paying off over $100,000 worth of debt will inspire and motivate you to take control of your money. He blogs at BrianBrandow.com