Most Americans don't think they need to be millionaires in order to achieve financial success.
Fewer than 20% of Americans define being "financially successful" as "being a millionaire," according to Bankrate's 2024 Financial Success survey.
Here's how that breaks down by generational cohort:
- Gen Z (ages 18 to 27): 16%
- Millennials (ages 28 to 43): 12%
- Gen X (ages 44 to 59): 13%
- Baby boomers (ages 60 to 78): 12%
One reason for this may be because $1 million doesn't go as far as it used to due to the depreciating value of money over time, says Sarah Foster, Bankrate's principal U.S. economy analyst.
"Millionaires might not be considered as 'wealthy' as they used to be," she tells CNBC Make It. "Fifty years ago, in 1974, $1 million had the same buying power as [around] $6 million today."
How Americans actually define financial success
When it comes to defining financial success, the majority of people don't necessarily think of a specific number or income level.
Nearly 60% of Americans say they would feel financially successful if they were able to "live comfortably," according to the survey. That means being able to afford day-to-day expenses while still putting money into savings.
That's understandable considering most Americans wouldn't be able to cover a $1,000 emergency expense without using a credit card.
"Salary is often not the best barometer for financial success," Foster says. "Middle-income Americans who have a strict budget and save any amount they can for the future may feel more financially secure than the Americans with six-figure salaries who have credit card debt and no budget."
Increased prices for everyday necessities such as food and housing may also shape the way Americans picture financial success.
"Those sentiments might cause them to abandon the idea of striving to be rich, instead wanting to just get to a point where they're not worrying about their finances," Foster says.
Achieving your definition of financial success
Most Americans are optimistic that they'll be able to achieve financial success one day.
A little over 60% expect to be financially successful in the future and 11% already consider themselves financially successful, according to the survey. However, nearly 30% believe they'll never reach that milestone.
If you find yourself falling into that last category, it's important to evaluate your own definition of financial success, then create a plan to reach it. That starts with gaining a clear understanding of your income versus your expenses.
"My best advice in this high inflationary era is to have a razor-sharp budget," Foster says. "Get specific with how much you can afford to spend while still having enough money left over to contribute to at least some of your financial goals."
But above all else, remember that you're unlikely to reach financial success overnight. After you've created your plan, it's going to take consistency and discipline to stick with it and reach your goals.
"It's important to get in the mindset that achieving financial success is a journey, not a checklist that you can eventually forget about once you hit your goals," she says.
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