How Much Money You Really Need To Keep Up With the Average American Lifestyle
The American lifestyle means something different to everyone, but for many, it still includes owning a home, driving a reliable car, taking vacations, enjoying life and saving for retirement.
For a growing number of households, however, that version of the American dream feels out of reach and more like a fantasy. Household debt in the U.S. reached a record high of $18.8 trillion at the end of 2025, according to the Federal Reserve Bank of New York. That figure — which includes mortgages, auto loans, credit cards and other consumer debt — breaks down to roughly $154,000 per household.
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With the cost of living soaring, Americans are paying skyrocketing prices for food, gas and just about everything else. Getting ahead financially is still possible, but maintaining a comfortable middle-class lifestyle now requires a bigger paycheck than it did before.
What the Average American Spends
The average American spends $78,535 a year on expenses, including housing, transportation, food, healthcare, insurance, entertainment, education and more, according to the latest U.S. Bureau of Labor Statistics. That's about $6,545 a month.
To live comfortably in 2026, a single person needs $65,000 to $100,000 and a family needs an income of $80,000 to $150,000, according to Jenny Groberg, founder and CEO of Booksmarts Accounting, but she said that required income will "vary depending on a person's debt."
Location, goals and lifestyle choices also play a role in what a person should make.
Why Basic Living Expenses Are Squeezing Americans
Over the last few years, Americans have been hit hard in the wallet due to several factors, such as inflation, geopolitical conflicts, higher interest rates and more. One major expense that still puts stress on people is housing.
“Banks often qualify people for housing payments that are 35% to 36% of their gross income,” Groberg said. “Because housing consumes so much of people's paychecks, any rise in cost -- whether food, gas or credit card interest -- causes catastrophic financial strain."
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For James Comblo, partner at Prosperity Capital Advisors, the issue extends beyond housing alone. He said it's a combination of essential items that puts pressure on households.
“Housing, insurance, healthcare and transportation have all repriced higher at the same time — and none of those are discretionary,” he said. “They’re fixed costs and that means a larger percentage of every paycheck gets absorbed before people ever get to lifestyle spending.”
Increasingly, the middle class isn’t struggling because of overspending — but because basic living costs have become harder to absorb.
Higher Prices Are Here To Stay
You’re not imagining that costs across the board have jumped and many Americans are still adjusting to the reality that everyday life costs significantly more. That disconnect is one of the biggest financial challenges people face today, Comblo said.
“Many Americans are still mentally pricing life based on what things cost five or 10 years ago — I find myself falling into this in my own life,” he said. “But the cost of everyday life has fundamentally changed and what used to support an upper-middle-class lifestyle now might support something much more average.”
The difference between what people expect their income to buy and what it actually buys is where much of today’s financial stress comes from.
Lower Your Expenses
With costs for basics rising, staying financially on track isn’t easy. But Groberg said adjusting spending habits can make a meaningful difference.
“Financial comfort isn’t tied to income; it’s tied to debt,” she said.
When income increases, spending often rises alongside it — and that’s where many people lose ground financially and need to lower their expenses, according to Groberg.
“The real financial conversation needs to be not how rich you are or how much you are making, but how resilient you are and how much debt you are shouldering,” she said. “Americans need to redefine success not as luxury, but as stability — having peace of mind and less stress.”
With that, you can pivot and adjust.
Keeping up with the average American lifestyle looks far different today than it did a decade ago, thanks to a higher cost of living and experts agree that what once felt like a comfortable salary no longer stretches as far as it used to.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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