The cheapest major city to achieve the famed ‘American Dream’ still requires a family to bring in a six-figure yearly salary.
A household needs to make a minimum of just over $102,000 in order to live a comfortable life in Wichita, the largest city in Kansas, according to a new study from GoBankingRates.
‘For several years, many Americans have said they need to earn six-figure salaries to feel financially stable and successful,’ GoBankingRates writer Heather Taylor wrote accompanying the study.
‘This amount of money is quickly becoming a non-negotiable factor for enjoying a good life.’
The personal finance website examined statistics from a swathe of federal agencies that keep track of the average cost of housing, cars, groceries, child care and other non-discretionary spending categories across the 50 largest cities in the United States.
The minimum salaries needed to meet these basic costs were applied to married couples with children and a home in these cities, according to the methodology of the study.
Known for being the longtime home to aircraft manufacturers like Beechcraft, Wichita is the 48th largest city in the US with a population of more than 389,000 people.
The median household income in the city was $63,072 as of 2023, meaning the majority of workers in Wichita falling at least $40,000 short of meeting that minimum threshold to live out the American Dream.
The cheapest city for a family to achieve the American Dream is Wichita, Kansas, according to a study by GoBankingRates
A household must earn $189,306 in a year to live comfortably in Washington D.C., the nation’s capital, making it the most expensive city in the United States
The median household in the US overall brought in $80,610 a year, according to 2023 data from the US Census Bureau.
The American Dream is an idea that was coined by historian James Truslow Adams in 1931. He described it as ‘a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable…regardless of the fortuitous circumstances of birth or position.’
A more contemporary conception of the American Dream is generally thought of as reaching the milestones of owning a home, starting a family, having a stable job or owning a business.
Other cities that are the cheapest to live in relative to the others on the list include Louisville, Kentucky ($103,754); El Paso, Texas ($108,424); and Raleigh, North Carolina ($109,747).
The salary requirements to live comfortably in America’s biggest, most influential cities are dramatically higher.
Washington D.C., the nation’s capital, is the most daunting by far, with residents needing to earn $189,306 in a year, according to the study.
Rounding out the top five are Boston, New York City, San Francisco and San Jose, all places where a salary of at least $167,000 is the new standard.
California had nine cities, the most on the list, where making over $102,000 is needed for a single family to live comfortably and within their means.
New York City is the third most expensive city in the country to live, slightly behind Boston
San Francisco is the fourth most expensive city in the country and the costliest in California as well
In Wichita, along with all the rest of the cities studied by GoBankingRates, a monthly mortgage is the most costly expense for families on an annual basis.
Housing traditionally takes the biggest bite out of people’s income. However, this has become exacerbated for Americans who bought homes within the last three years, precisely when the Federal Reserve began hiking interest rates to combat inflation.
Since September 2022, the average 30-year fixed mortgage rate has ranged from a low six percent to a high seven percent. In July 2021, the average rate was as low as 2.1 percent.
Average monthly mortgage payments have nearly doubled in the last four years, largely thanks the increasing amount of interest homeowners are handing over to banks.
Those looking for a return to the early-pandemic era of near-zero interest rates may have to wait a long time, given that Fed Chair Jerome Powell has said just two cuts are possible in 2025.
Child care is routinely the second biggest expense families have to worry about, according to the study.
As of September 2023, sending young children to daycare costed more than public college tuition in 28 states.
Another report found that child care costs have risen 220 percent since 1990 – far outstripping the general rate of inflation.