How the American Dream Is Keeping Us Broke

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American Dream window shopping
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By ASHLEY STETTS

Our grandparents grew up in a time when you had to learn to be resourceful.

Things were fixed and not replaced, women made their own clothes, and neighbors shared one phone. Things were purchased because they were necessary, not because they were simply wanted -- and guess what? No one would ever have dared to refer to your Nana as a cheap-ass.

So where did we go wrong? Research from Ohio State University found that people in their late 20s and early 30s carry significantly higher credit card debt than older generations and pay it off much more slowly. Much of this can be attributed to the rising costs of education, but the bigger problem, in my opinion, is our generation's fear of looking cheap.

Looking Rich Doesn't Make You Rich

Success is naturally equated to wealth, and no one idolizes someone who isn't successful. The younger generation adores ultra-rich celebrities, and this has only helped to morph the American Dream into a whole new level of status and luxury we all think we can achieve.

In pop culture today, having the appearance of wealth trumps actually having any money. We see rappers in chinchilla jackets popping Ace of Spades champagne in their videos, not driving a Toyota and having game night in with their friends. Kanye said it best: "What you think I rap for, to push a fu@#ing Rav4?" What needs to be understood, though, is that people who are really wealthy actually attribute their frugal habits to getting and staying there.

The number one quality of successful people is living below their means: For example, there are 1,138,070 millionaire households living in homes valued under $300,000, yet at the same time, 86 percent of people driving the most expensive "status" cars are non-millionaires.

Most people who actually have money are not scared of seeming cheap -- that's how poor people think, and it keeps them poor.

Why 'Cheap' Isn't an Insult

Pictured: Ashley Stetts
Pictured: Ashley Stetts
I've lived in New York City -- a not particularly inexpensive city -- for nine years, and I saved almost a half a million dollars before I was 30. I didn't create some stupid app that I sold for a bunch of money -- I was a waitress and a model. I wasn't even a big model. Not even close, actually ... I mean, I'm not ugly or anything, but you get the point.

I lived in an affordable apartment, I never took taxis, and I never feared being labeled as cheap. Did people call me that because I always looked for better deals and watched my spending? Sure, but while they racked up debt in an attempt to show everyone how well they were doing, I was putting myself in the position to have the money to invest in my future.

Who knows -- maybe this is what the future will be: Those who know to sacrifice will be the ones who ultimately live in comfort, and those who feared looking cheap while rocking Louboutins and Gucci loafers will be forever unable to move out of their parents' house.

Where will you be?

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Jon Ulin

Great article. 50% of our conversations at http://www.ulinfinancial.com/ in our client meetings- are def. about lifestyle choices that people make in the short term - as studies note that 80% of Americans enter retirement in the long term with 20% or less of what they need to not go broke and outlive their money.

May 12 2013 at 2:33 PM Report abuse rate up rate down Reply
djnieme

Anyone from AOL, who’s actually a moral and upstanding employee, is there any possible way YOU could investigate my concern about anyone from your company hacking into any of our email accounts and stealing information and say, STORY IDEAS? I know this completely sounds stupid and insane, but this is one of A NUMBER OF AOL STORIES that actually coincide with some writing pieces that I store on AOL. Sure it can be circumstantial, but I’ve noticed some AOL stories correlate with my saved and emailed pieces chronologically. A little help here please. Thanks.

April 30 2013 at 11:30 AM Report abuse rate up rate down Reply
djnieme

Sorry folks, this going to come off as a little insane and well, cantankerous. But

I find it pretty strange that AOL has yet again reported a story that I’ve mentioned in a book that I typically save in one of my AOL accounts. This story being one of them. I can’t ever be certain and simply blame AOL for hacking and stealing people’s personal information, BUT FOLKS, keep in mind, this is very possible. I’m sure anyone has common sense to realize that most or all of our private information is seen by someone (inadvertently) other than ourselves.

We no longer have privacy. And it’s company like AOL who have the easy access (i.e. YOUR EMAIL) to do so and get away with. WHO EVER MAY BE DOING SO FOR and FROM THIS COMPANY, GOD IS ALWAYS WATCHING ALL OF US….THAT AND KARMA REALLY CAN BE A *****. Roll your eyes all you want, I have hunch that this does happen AND BY COMPANIES LIKE AOL…and when anyone does something like this, it’s as if they always get away with it…eventually you just might regret doing such a thing. People like that including some CEO who allows deserves a prison sentence.

So incase my hunches are correct, AOL, please do you own research without criminally meddling with people’s private information…can the investigative “terrorist” excuse. How disgusting if I’m right about all this. ATTENTION CIA….FBI…..little help here.

April 30 2013 at 11:26 AM Report abuse +1 rate up rate down Reply
Cindy

She didn't have children. Most people live paycheck to paycheck with nothing to save.
When I was raising my daughter, I gave up alot so my daughter could have what she needed.
I drove a Toyota(still do).
People who are underemployed live with relatives in their basement.
So, her case is not common.

April 30 2013 at 9:01 AM Report abuse rate up rate down Reply
jeffc152

Wow. It looks like barackulaussa smoked a little too much crack today...

April 30 2013 at 12:58 AM Report abuse +2 rate up rate down Reply
mccalteaux

One of the best articles I've read in a long time. I've been living it for a long time. I enjoy a splurge now and then but it's usually on a gift for someone else and it's always planned for. I always wanted enough money to pay my bills with a little for extras like things for others. You can be seen as generous and be "cheap" at the same time.

April 29 2013 at 7:47 PM Report abuse +1 rate up rate down Reply
ravennightfall31

The American Dream doesn't exist. It was just a slogan for foreigners running away from their problems. Backfired nicely wouldn't you say?

April 29 2013 at 2:37 PM Report abuse rate up rate down Reply
hb341

Okay lets break this down - $400,000.00 divided by 936 weekends = $427.35 or just over $200 per date. Just saying...

April 29 2013 at 2:05 PM Report abuse +1 rate up rate down Reply
Jeremiah

"Much of this can be attributed to the rising costs of education, but the bigger problem, in my opinion, is our generation's fear of looking cheap."

And a lot of debt can be attributed to the irreparable nature of almost any item you can buy today. Who can fix or repair a 2013 car today? Who can repair a TV? Who can fix a computer?

Almost everything made today is easier thrown away, than worked on to keep it going.

April 29 2013 at 1:38 PM Report abuse -1 rate up rate down Reply
1 reply to Jeremiah's comment
legacykwst

And let's not forget all the "service plans". In these days, if you work... or even if you don't.... being "connected" ... having a Smart Phone... is a necessity. I interviewed for a job where I was actuallyi asked if I had an iPhone... not just a Smart Phone, but an iPhone.... I didn't... would I be willing to get one? If not, no job. Employees are often bearing the costs of companies communications because many businesses expect employees to use their private phone and Internet plans... and the don't reimburse. Moreover, there's the cost of rapidly evolving technology and software. Recently there was something about PC sales slowing... people not upgrading. They can't afford to... and what they have is doing the job they need it for.... but they are spending on the mobile media. What Jeremiah says about not being able to repair is correct... and often it's stuff that if you hope to work or get work, you absolutely have to have. But it doesn't just extend to electronics, etc. I've always sewn.... I used to pick up extra cash doing repairs and alterations on good quality clothing.... That's become increasingly problematic because even the high quality clothing is constructed in ways that make alterations more difficult or impossible - fusible interfacings, glued hems, etc. Many shoes cannot be repaired or resoled because of the molded composition soles.

April 29 2013 at 2:13 PM Report abuse +1 rate up rate down Reply
jrb1863

Once upon a time you could live on minimum wage. I myself lived on $1.75 per hour in the early 70s. I didn't live a luxurious life but I was able to go out and have fun and take short trips. It has been many years since anyone was able to live on minimum wage. Also, I remember paying $5 for a doctor or dentist visit. Even in the 80s it was $25 for a general practice doctor and $50 for a specialist. Now a doctor visit will set you back at least $300. These things have nothing to do with Obama's policies.

April 29 2013 at 1:30 PM Report abuse +2 rate up rate down Reply