The Changing American Dream: Focused on Being Debt-Free

The American Dream is fading away from owning a home and having 2.5 kids to one of being debt free. What's it mean for future generations?

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Each generation develops a reputation and parenting style that shapes the financial habits of the next generation, and many are wondering what traits millennial parents will pass along to their children.

"Depression-era parents taught, 'a penny saved is a penny earned,' " says Robert Wendover, director of The Center for Generational Studies. "But they didn't live in a consumer society like we have now. Millennials think that installment debt is not as important to pay off, it's not as high on their radar. How they will transfer that understanding to their kids still remains to be seen."

The traditional American Dream of owning a home and having 2.5 kids is quickly fading as younger generations strive to save more for retirement and become debt free.'s latest survey found that for most respondents, their ultimate financial goal was retiring financially secure at age 65 (27.9 percent). However, a close second say being debt-free was their top priority. Those ages 18-to-24 were most likely to name being debt-free their top financial goal, and were least likely to cite home ownership or joining the 1 percent as their top ambitions.

The survey was conducted by GFK Custom Research for, based on 1,000 interviews with Americans 18 and up.

Millennials have gotten a rude wake-up call post-recession, says Wendover, and for many reasons, their aspirations have changed.

"Five years ago, those 25-year-olds may have said, 'I want to be a millionaire by the time I am 30.' But the economics are very different, the optimism has dampened and their expectations have been lowered in the process."

Previous generations that had been through trying financial times, most notably depression-era parents, raised their children with certain financial mentalities, according to Wendover, and he says having parents with debt-free goals will undoubtedly shape future children.

Adam Levin, founder of, says millennials are likely scarred by the debt it and its predecessors have accumulated and its long-lasting repercussions that include delaying buying a home, getting marriage and having children.

"This debt is a drag on the housing market, impacts decisions as to where people live, send your kids to school, and how much discretionary money you have," Levin says. "For many people, the definition of succeeding is now just surviving."

Values millennials pass onto their children will of course vary, but Levin says caution will be a common trait passed along.

"I think more people are trying to get their children into the mindset of buy what you want, do what you want, but make sure in the back of your mind there is that voice that says, 'be careful, this won't last forever,' " he says.

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More people save their way to wealth than invest their way to wealth.

Stick with your first spouse and first house.

People enter the middle class from poverty, and stay in the middle class, by saving money. But when the value of their money is eroded by the government that issues it, for the sake of financing government debt, it is increasingly difficult to stay in the middle class. The upper class owns real assets, which tend to maintain value or increase with inflation. The poor have no assets, their lives are worsened by inflation but, lacking credit opportunities, they may have a net worth of zero, which is actually better than the negative net worth of recent college graduates.

"Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose.” J.M. Keynes - 1919

Inflation and taxes are destroying the middle class. They complete the job by borrowing to buy depreciating assets.

September 25 2013 at 1:55 AM Report abuse rate up rate down Reply

Being debt free should have always been the goal of every American.

September 11 2013 at 4:31 PM Report abuse rate up rate down Reply

It's easy to see why so many don't live debt free. Just read the pathetic spelling from the ignorant souls below. The United States has the greatest number of world-class losers of any nation on earth. If you can't make it here, just where in the world can you make it? Living debt free is nothing more than living below your means. And don't let some politician or any other Bozo tell you what your "American Dream" is. It's up to you, as an individual, to decide for yourself.

September 11 2013 at 4:12 PM Report abuse +3 rate up rate down Reply
1 reply to Condley's comment

Ignorant liberal souls.

September 11 2013 at 4:16 PM Report abuse -1 rate up rate down Reply

Evan lives debt free in his mom's basement.

September 11 2013 at 4:04 PM Report abuse rate up rate down Reply
G2 Services, Ltd

We have been debt free for about 10 years. It has given us plenty of opportunities to buy land and other investments at bargain prices. Pay cash and you will spend less. Live with a budget and over time you will see the wisdom of compound interest.

September 11 2013 at 3:46 PM Report abuse +3 rate up rate down Reply

Unless you save from the time you start working you will always be in debt. You have to take care of yourself by putting some no matter how small amount away for the rainy day you will be happy you did.

September 11 2013 at 3:24 PM Report abuse +2 rate up rate down Reply

The problem is that everyone is scared to invest money. If they go into the stock market, it crashes. If they buy a house, real estate prices fall.

Any sort of investment is for the long term. I've seen the markets crash in 1987, during Bill Clinton's second term (I don't remember the exact date) and 2000. It's not a big deal. Markets rebound. If the stock market crashes, you get on the phone with your broker the next morning and put spare cash into good stocks.

Likewise, if the value of your house falls, so what? You need a place to live. Absent a job transfer or having triplets and needing to sell, you can just sit. I've been in my house since 1998 and don't plan on selling it for another 30 years. My parents lived in their house for 43 years and would have stayed longer, if their health hadn't declined.

September 11 2013 at 1:09 PM Report abuse -1 rate up rate down Reply

Who stole the American dream? Corporate America did.

September 11 2013 at 11:22 AM Report abuse +5 rate up rate down Reply

No wonder corporations are making record profits, no full time work, no health care benefits.

September 11 2013 at 11:20 AM Report abuse +5 rate up rate down Reply

The gap between rich and poor narrowed after World War II as unions negotiated better pay and benefits and as the government enacted a minimum wage and other policies to help the poor and middle class.

Bring back the Unions which built the middle class.

September 11 2013 at 11:15 AM Report abuse +1 rate up rate down Reply
1 reply to gopisstupid2's comment

Reasons why companies close leave or move. Unions, taxes, and regulations..

September 11 2013 at 11:22 AM Report abuse -1 rate up rate down Reply
1 reply to rjmjlm711's comment

Bush gave tax cuts to corporations who outsourced American jobs. Over 3 million jobs outsource under Bush. Obama and the dems wanted to end this tax cut but republicans blocked it. Who is on the side of the American worker? It surely isn't the republican party.

September 11 2013 at 11:27 AM Report abuse +3 rate up rate down