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How Does the Average Person Spend Money?

Have you ever wondered how your spending compares to that of the average American? If you have, you’re in luck. Every year, the Bureau of Labor Statistics releases data describes the spending of the average American.

Since very few of us actually dig into the details of how we spend money with those around us, it’s hard to know how we stack up. Is there something we do really well? Is there an area to improve?

In this article, we’ll go through the way in which Americans spend their money. In this survey, each consumer unit contained an average of 2.5 people, with an average of 1.3 earners. The average age was 50.1. Each consumer unit owned an average of 1.9 vehicles. 63.7% of those surveyed owned their own homes.

Bringing Home the Bacon (And Spending It)

The average family brought home $63,784 in income before taxes. Out of that total, the average American family spent $51,100. In other words, they spend pretty much everything they earn.

Out of that total spending of $51,100, the spending breaks down to:

  • Housing – $17,148 (33.5%)
  • Transportation – $9,004 (17.6%)
  • Food – $6,602 (12.9%)
  • Insurance and pensions – $5,528 (10.8%)
  • Healthcare – $3631 (7.1%)
  • Other – $3,267 (6.4%)
  • Entertainment – $2,482 (4.9%)
  • Cash and donations – $1,834 (3.6%)
  • Apparel and services – $1,604 (3.1%)

Of the $6,602 spend on food, $3,977 (60%) of the money was spent on food at home, and $2,625 (40%) was from dining out.

Over the last year, Americans spend more on healthcare, mostly due to insurance costs. Health care costs have risen every year since 1996. We spent less on cash contributions however, which include support for college students, child support, and giving to charitable organizations.

How Do The Rich Spend Money Compared to the Poor?

If that’s how the average American spend their money, what about the rich and the poor? According to the Bureau of Labor and Statistics, those with lower incomes spend a larger portion of their income on housing and food, while those with higher incomes put more away in pensions and other savings.

spend money - rich vs. poor

Focus on the Big Spends to Build Wealth

After taking a look at the numbers, it’s easy to see where Americans spend most of their money: housing, transportation, and food. If you want to build wealth, it’s important to optimize these big expenses to save the most amount of money with the least amount of effort.

Let’s say you’re trying to spend less on clothes, so you put back a $30 shirt at Target. If you eat out four times a week with your coworkers for $15 a meal, you’ll spend twice the amount of the shirt on lunch every week! Bringing your lunch will save a lot of dough over the long haul.

spend moneyIt might seem difficult to save money on housing. After all, if you are a homeowner, there are huge transaction costs to buying and selling. But if you’re house poor, it’s going to be difficult to make financial progress, even years down the road. If you’re truly honest with yourself, then it might be time to downsize or move to a cheaper area. If you rent, this is much easier. By moving and renting a cheaper place, saving you $300 each month, you’re saving the equivalent of ten $30 Target shirts every month just from that one financial decision…

When it comes to transportation, there are many ways to spend, including the payments (but hopefully you paid cash for your car), gas, maintenance, and insurance. But one large cost of transportation is less obvious: the value of the car will depreciate over time. A car loses 60% of its value within the first five years. That’s why it’s often a great financial decision to buy slightly used cars.

It’s important to buy the right car to reduce transportation expense. By purchasing a used car, you’ll let someone else take the financial hit of depreciation. And, they also cost less to insure. Doing your research to buy a reliable car will also reduce your maintenance costs over time.

Secondly, the less you drive, the less you’ll spend on transportation. Can you choose your next home so you’re close to work, groceries, and your everyday activities? Can you bike or walk instead of drive? You’ll get more exercise and spend less money.

Find the Frugal Trifecta

To really bump up your savings, try to find the frugal trifecta: a place to live that’s inexpensive, close to work, and close to an inexpensive grocery store. This will allow you spend less on housing since the mortgage payments will be cheaper, you’ll spend less on transportation since you’re so close to work and the grocery store (and you therefore also don’t need a super-dependable car since you could easily take your bicycle instead), and you’ll be more prone to get groceries instead of dining out! Boom, the trifecta!

How do you spend money? What are your best saving tips?

This post has been written by Jenna, our staff writer who hails from



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I find it fascinating that most people are spending more on transportation then they are on food. It just goes to show how obsessed the typical American is with having an overpriced vehicle and then spending huge amounts of money on fuel. It would be interesting to look up similar statistics for other countries. I imagine the amount spent on transportation would be much smaller in other countries in Europe or Asia.

    • I’d love to see the numbers on that as well! From my travels in Europe, it seems like public transportation is better there. I’d guess that transportation costs would be less there as well.

      • From what I know, cars are also just much more expensive in Europe/Asia, not to mention fuel is double what it is in North America. With shorter distances between places, there is less of a need for a car as well. That said, many people still have cars, but they are a lot smaller.

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