(Daily360.com) – New data shows the cost of living for what was always thought to be the “normal” American life is becoming too expensive for many people. The data are revealing and show that, for the average American couple to raise two children, have a pet and own a home, it will cost them everything they earn plus $1 million.
An Investopedia study determined that for one to own a home, own a car and send two children through school will cost about $3.5 million total. When comparing that number to the average $2.3 million an American earns in a lifetime across different fields and education levels, the potential shortfall could be devastating. Owning a home, raising children and having a car were all at one time considered standard for Americans but that is sadly no longer the case.
The two biggest culprits among many are the rising cost of inflation and high interest rates. In October of this year, mortgage rates rose to their highest ever at 7.79% which would make the expense of owning an average home in America cost as much as $796,998. The Biden administration is trying to sell the public on the idea that the mortgage rate moving from that high to the current rate of 7.03% is a win for homebuyers, but in reality that number is still too high for most prospective buyers.
Two children will likely cost parents as much as if not more than the house. The estimated expense of raising two children to the age of 18-years-old is about $580,000. However, with the recent trend of children staying home past 18 years of age, that cost would be considerably higher. Of that number, the bulk will be spent on education, with even an in-state college costing about $42,000 per year. For even more perspective, with the current state of health insurance in the country, parents should be expecting to pay about $6,000 out of pocket just for the births of the children.
Rounding out the picture people should look at their weekly and yearly take home pay and measure it against potential expenses. Some such expenses could include a $67,000 commitment to a dog or cat, assuming they live about 15 years. People can expect to spend $36,000 for an engagement ring, $270,000 in automotive expense and nearly $1 million for health insurance. All expenses would also need to be weighed against coming inflation as well.
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