Is Being a Millionaire Enough Anymore?

With inflation at record-level highs, even millionaires don’t have the same purchasing power they did a decade or more ago.

group of chess pawns representing the poor separated from the wealthy
Updated May 28, 2024
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At the start of 2022, inflation rates had climbed an astonishing 7.5% from January 2021. And if you’ve visited a grocery store or your local Starbucks lately, you know prices are still swelling.

As a result, your dollar doesn’t go nearly as far as it used to. The amount of wealth you have to accrue just to stay afloat (much less to achieve a life of leisure) is much higher now than it was in the ‘80s, ‘90s, or early 2000s. Even $1 million doesn’t have the same purchasing power it used to — and for regular Americans, who averaged a median income of about $67,000 in 2020, the dream of not living paycheck to paycheck and having enough money to get by feels further away than ever.

So how much money is enough money? For starters, at least enough to cover the essential expenses we list here. Let’s take a look.


Ursula Page/Adobe street view of a new construction neighborhood

These days, the thought of paying $120,000 for a decently sized house in good condition is laughable. But as recently as 2000, the median housing cost for an average American family was only $119,600. Depending on where you lived in the country, you could expect to pay even less for an average-sized home: In Mississippi and Oklahoma, for instance, the average housing cost hovered around $70,000.

But if you grew up in the ‘80s, went to college during America’s booming ‘90s, then tried to buy a house in the year 2000, the price of turn-of-the-century homes compared to your childhood home would have floored you. In 1990, the average cost for an American home was around $79,000. Just 10 years earlier, that number was $47,200, meaning the average housing cost more than doubled between 1980 and 2000.

If housing costs had followed the same pattern from 2000 to 2020, you’d be looking at a median cost of $240,000 — an unthinkably high amount in 2000, but an incredibly reasonable one in 2020. Instead, housing prices did much more than double. In 2022, the average home value is just over $345,000, which spells an increase of 19.8% in the last year alone.

That increased pricing makes everything about the housing market — from buying or selling a house, purchasing a townhome or condo, or investing in real estate — exponentially costlier (and riskier) than it was just five years ago.

New cars

Minerva Studio/Adobe woman receiving keys of her new car from dealer

Like houses, new cars hit record high prices in 2022. (Spoilers: so does every other category on our list.) And while used car prices are finally starting to decline, new cars are only getting more expensive.

In June 2022, Americans paid $48,043 on average for a new car. Compare that to 2000, when you could expect to pay just $21,000 for a new car. Or 1990, when new cars cost just $15,000.

But as early as 2012, new cars cost closer to $24,000 — only a few thousand dollars off from the average 2000s price. So what gives?

Today’s supply chain problems and other COVID-19-related disruptions have resulted in scarce inventory. Limited products and high demand lead to record-breaking costs for new cars, which helps explain why car prices are now more than double what they were in 2010.

Used cars

Yuri Bizgaimer/Adobe cars for sale stock lot row

In contrast to new cars, used cars are rarely in short supply. Car ownership turns over constantly, so the used car market doesn’t have to deal with scarcity inflating prices to the same extent as the new car market.

That’s not to say used cars are anywhere near as affordable as they were a year, a decade, or several decades ago. In fact, used car prices have ballooned more than most other cost-of-living expenses on our list.

In June 2022, used cars averaged $28,012. While that number isn’t terrible compared to the average new car cost, it’s a full $20,000 more than 2010’s average used car price of $8,715. Even more shockingly, $8,000 has been the median used car cost since 1995 — a full 15 years of inflation-resistant pricing followed by a 250% increase in 10 years.


nataliaderiabina/Adobe kids draw and make crafts

According to the federal government, “affordable” childcare must cost less than 7% of a household’s total income. Unfortunately, by that definition, affordable childcare doesn’t exist in any state in America, and inflation is only making the problem worse.

Unlike most other necessary expenses, childcare costs have historically increased at a faster pace and higher rate than inflation. While the average American family’s income has gone up by over 140% since 1990, childcare costs have increased nearly 215% over the same time period.

Between 2019 and 2020 alone, childcare became $1,000 more expensive on average. Two years later, parents pay $1,230 a month (over $14,700 a year). In nearly 30 states, that amount exceeds annual tuition for a four-year public college.


woman hand hold supermarket shopping cart

At an average of $411 a month, groceries cost dramatically less for most American families than childcare, housing, and cars. But food is far from cheap, and inflation means it requires a much larger chunk of your budget now than it did a year ago.

In 2021, the cost of food went up by 3.5%. For the last 20 years, food prices had gone up by no more than 2% a year — so 2021’s increase was a remarkable 75% higher than usual.

But not all food prices increase at the same rate. Beef in particular costs 9% more on average in 2022 than in 2020. In contrast, fruit prices only went up 5.5%. Your dollar goes further if you’re buying fruit instead of meat, but most American families don’t survive on fruit alone. Instead, today’s families may have to cut down their fruit consumption to afford meat for the week — or vice versa.

Gas and transportation

Minerva Studio/Adobe Gas station

If you drove a car in the 2000s, you might have spent this summer thinking longingly of the previous decade’s high gas prices. Even in the summer of 2008 when gas was a record-breaking $4.11, that high price was still $0.50 below 2022’s (most recent) high of $5.03.

Prior to 2000, it was unheard of for gas to cost over $1.30. In the late ‘90s, gas prices sometimes dipped beneath $1. (That probably won’t happen again anytime soon.)

There are still a few things you can do to minimize gas costs, like choosing one of the top credit cards with gas rewards. Still, it’s hard to make the most of your dollar when gas prices are $5 a gallon — so we hope gas prices keep trending down for the rest of the year.

Further cost of living calculations

fizkes/Adobe woman works with bills invoices at home office

We’ve covered the basic cost of living increases, but we left out quite a few, including clothing, tuition, and healthcare. If you’re curious to know how other items have changed cost from the 1980s till now, the Minnesota Fed has a great calculator for you.

Bottom line

Arthon/Adobe plant trees on coins and calculator

While there are signs of slowing inflation, like decreasing gas prices and a lower-than-expected inflation rate in July, high costs aren’t likely to stabilize anytime soon.

Our advice? Take a look at how the 1% lives, then start implementing their strategies for dealing with inflation. While $1 million might be easier to attain now than it was a century ago, even that chunk of cash won’t buy as much as it did in the past — so start saving now for a future where your dollar has an even shorter reach than it does in 2022.

Author Details

Michelle Smith

Michelle Smith has spent a decade writing for and about small businesses. She specializes in all things finance and has written for publications like G2 and SmallBizDaily. When she's not writing for work at her desk, you can usually find her writing for pleasure near large bodies of water.