Do you ever wonder how your spending compares to other people’s? It’s natural to be curious about other people’s finances. And knowing how your spending stacks up could clue you in as to whether some changes may be warranted. With that in mind, here’s how Americans are spending their money these days, according to new data.
1. Housing: $1784
The average American spends $1,784 on housing, but that total includes expenses like utilities and maintenance. Now in reality, housing may be your largest monthly expense, and since it’s easy to tie your quality of life to the home you live in, it may be worth it to spend a little extra on the roof over your head. As a general rule, your housing costs really shouldn’t exceed 30% of your take-home pay. If you’re beyond that point, you may want to consider moving or downsizing.
2. Transportation: $819
Transportation is the typical American’s largest expense second to housing. The $819 the average person spends includes not just auto loan payments, but also car insurance, maintenance, and gas. And given that gas prices are up these days, it wouldn’t be surprising to see that number increase.
3. Personal insurance and pensions: $604
Buying life insurance is an important step toward protecting your loved ones. In a way, it’s a good thing to see the average American spending a decent chunk of money on insurance (as a point of clarity, homeowners and auto insurance are not included in this category). That said, within this category, only a small portion generally goes toward insurance. The rest goes toward retirement plan contributions and Social Security taxes, which are unavoidable.
4. Healthcare: $431
Even Americans with insurance spend a lot of money on healthcare. For one thing, many people pay a portion, if not all, of their insurance premiums. Add in deductibles, copays, and medical supplies, and it’s easy to see why healthcare is a big expense.
5. Groceries: $412
Food costs are up these days thanks to inflation. Unsurprisingly, groceries take up a pretty big chunk of the typical person’s income. But it makes more sense to spend extra on groceries than on restaurant meals. Fun as it may be to dine out, you get much more value for your money when you purchase groceries and cook meals yourself.
6. Entertainment: $243
We all deserve to enjoy life in between working. The typical American spends $243 a month on entertainment, and that’s a totally acceptable sum to plunk down if you’re covering your essential bills and aren’t running up a tab on your credit cards in the process. But if you’re struggling to make ends meet, you may need to cut back on entertainment temporarily.
7. Restaurants and prepared meals: $198
The typical American spends almost $200 a month on restaurants and meals away from home. If you’ve recently gone from working remotely to doing your job at an office, you might see your spending increase in this category. But be careful — restaurants and food establishments charge notorious markups, so if money is tight, you may want to consider preparing more of your own food instead.
Americans spend most of their money on these seven expenses, and your habits may or may not be comparable. But while knowing what the typical consumer spends might help indulge your curiosity, remember that at the end of the day, the amount the average person can afford to spend on housing, transportation, or other bills may not be the same as what you can afford. Rather than fixate on averages, make sure your current budget is working for you.
