The New American Dream: Why We Want Stability, Not Wealth
The "American Dream" has long been associated with milestones like homeownership, a comfortable retirement and building wealth. But for many Americans, the definition is evolving.
A new Nationwide report found that 84% of Americans now view the American Dream as achieving financial stability rather than accumulating wealth. Here's what's driving the change, how people are adapting and what it means for your money.
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Why the American Dream Is Changing To Mean Financial Stability
Financial pressures appear to be reshaping how Americans think about success. According to the report, 75% of Americans say their primary financial focus is covering basic expenses, while 45% have dipped into savings to pay for essential costs.
"When people are focused on meeting immediate needs, it makes sense that financial stability and resilience become just as important as building wealth, if not more," said Craig Hawley, president and COO of Nationwide Financial. "I don’t think that means Americans have given up on financial progress; they’re simply taking a more defensive stance focused on protecting what they have to preserve progress and avoid setbacks."
Americans aren't abandoning long-term goals, but they're prioritizing financial security first.
How Americans Are Adjusting Their Finances To Stay Stable
Many households are already changing their behavior in an effort to strengthen their finances.
The report found that 68% of Americans have reduced spending over the past year to improve their financial situation. At the same time, though, some coping strategies could create new challenges down the road.
"Nearly half (45%) have dipped into savings to cover essential expenses, for example," Hawley said. "The challenge is finding a balance between managing today’s financial pressures and continuing to make progress toward longer-term goals."
Finding that balance can be difficult. Cutting spending and drawing down savings may help households manage short-term financial stress, but consistently doing so can make it harder to reach longer-term goals such as retirement or building an emergency fund.
Why Many Americans Still Think the American Dream Is Out of Reach
Even as people redefine what the American Dream means, many remain skeptical that it's attainable. The report found that only 53% of Americans believe achieving the American Dream is realistic for people like them.
"It's understandable that people are feeling anxiety about their financial futures, especially given the financial pressures many households are facing today," Hawley said. "Ongoing market volatility and daily headlines can contribute to their worries. But I’m encouraged that Americans haven’t lost their optimism about the future."
That optimism shows up elsewhere in the survey: 7 in 10 Americans said they believe they can significantly improve their financial situation over the next five years.
"Our research shows that Americans are not giving up on growth, but they are seeking to strike a balance that will help them feel more confident they won’t lose financial stability due to circumstances beyond their control," Hawley said.
The findings suggest that while Americans may be redefining success, they haven't stopped pursuing it.
How To Build Financial Stability Without Sacrificing Growth
If financial stability is the new American Dream, achieving it requires a plan that addresses both today's challenges and tomorrow's goals.
"It starts with understanding where you may be financially vulnerable and putting protections in place without losing sight of your longer-term goals," Hawley said. "That can include maintaining emergency savings, protecting against a loss of income and considering how market risk could affect your income in retirement."
A financial professional can also help identify gaps and prioritize next steps based on an individual's circumstances and goals.
"You don’t have to choose between protecting what you have today and building for tomorrow," Hawley said. "A good financial plan should help you do both."
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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