The Spending Habits of the Average American
Published on - July 14th, 2009 (Modified on - December 1st, 2011) (by J.D. Roth) Last week, Diane dropped a line asking for information about the spending habits of the average American. She wrote:
I am trying to find sites that will provide average spending habits — such as how much an average person spends on food per week or how much a family spends on entertainment, that sort of thing. I am hoping to see where my habits line up with someone of similar means in the same part of the country.
I’m not sure of how to obtain regional information, but I know where to find national figures for comparison. Last week, a site called Visual Economics posted a chart showing where the average U.S. consumer spends her money. Here’s the chart in question, which has been making the rounds of the internet:
Click to open at full size in a new window.
Because I’m a skeptic by nature, I tracked down the source material used to create this chart. The data is drawn from the U.S. Department of Labor Statistics Consumer Expenditure Survey for 2007. Most writers seem to be missing this point (probably because the chart itself has a date of April 2009), but it’s an important one. This chart represents consumer behavior before the market meltdown — not after. (Here’s the source data [297k PDF].)
Some of the interesting bits from this survey:
- The average “consumer unit” surveyed had 2.5 people, of which 1.3 were wage-earners. This consumer unit earned $63,091 and had 1.9 vehicles. Exactly two-thirds owned their homes.
- This average consumer unit spent $49,648 in 2007.
- Average food spending was $6133, of which $3465 was spent on meals at home. Based on this data, one can conclude that the average consumer unit spends roughly $300 per month on meals prepared at home and roughly $225 per month on meals away from home.
- Average spending for housing was $16,920 for the year, which was way up from the $15,167 average for 2005. That’s an 11.6% increase in housing costs over just two years! Can you say “housing bubble”?
- I was surprised by the transportation costs. The average consumer unit spent $8758 on transportation, or about $725 per month. Holy cats! That’s insane. The average household could save big bucks quickly by optimizing their transportation costs.
Several readers asked for my opinion about this chart, including Sarah M., who wrote via Twitter: “I’d love to see your thoughts comparing the average annual consumer’s spending breakdown to what it should be!”
I don’t think it’s possible to say what the average consumer’s spending should be. There are too many variables. What works for me may not work for you. Each year, the average American spends $1881 on “apparel and services”, for example, but only $118 on books. My spending for these categories is nearly the opposite. In 2007, I spent $702.73 on books and $425.94 on clothing.
I actually think the source data [297k PDF] could be a great basis for a budget. I always have trouble deciding which categories to track in Quicken. If I opted to use the same category structure that the government uses when tracking consumer spending, I could easily compare my habits with the “average” American. (Too bad the government doesn’t track spending on comic books!)
Also, I’m puzzled as to why taxes aren’t included in this information at all. The chart doesn’t include taxes because the government survey doesn’t include taxes. If the average consumer unit earns $63,091 but spends $49,648, there are $13,443 unaccounted for. The personal saving rate in 2007 was less than 1%, so I’m guessing that most of the unspecified money goes to taxes.
Finally, I should note that last year we took a glimpse at the spending of the average American as revealed by The New York Times and the Consumer Price Index.
In my recent reader survey, there were many requests for more content aimed at non-U.S. readers. It’s unlikely I’ll devote entire articles to foreign issues, but when possible — such as today — I’ll try to find resources to help you do your own research. Here are similar surveys in other countries:
- Statistics Canada: Spending Patterns in Canada
- Australian Bureau of Statistics: Household Expenditure Survey, Australia
- U.K. National Statistics: Family Spending, Expenditure and Food Survey
How do your spending habits compare to those of the “average” American? I’m especially curious to hear how much GRS readers spend on books. The average of $118 per year doesn’t buy a lot of reading material. On the other hand, maybe people are using their public libraries! (One can dream, right?)
Lastly be aware of your spending habits that will help you be on your toe before taking any financial decision just by checking your credit report.More info how to get a free credit report?
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Like most Americans my spending habits are higher than the avg in some places and lower in others.
The BLS offers fantastic data, and I’d like to add another site to that. The St. Louis Fed http://research.stlouisfed.org/fred2/ has great data too. They allow you to build charts and compare economic statistics. I use it for research all the time.
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I actually spend more than $118 on books AND I use the library! My husband and I are avid readers. Also, I almost choked when I saw the transportation costs. I wonder why so many people live so far away from their jobs? I know a couple who could probably afford a $500-$600 higher mortgage payment just by moving closer to the city they both work in (they also lose at least 1.5 hours a day in their commute).
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My first reaction upon reading through the whole chart was, “why aren’t books included in entertainment?” I guess not all books are entertainment, but 90% of what I read is for fun. I generally either pull from my existing personal library (supplemented by book sales) or from a public library.
I spend less on things like transportation (we only have 1 car and I usually bike to work), entertainment, and clothing, and significantly more on housing (I live in the DC area) and cash contributions (I tithe).
Re: transportation costs: this includes car purchases. I think most “units” buy 1 car every 3-4 years. If the average purchase price is somewhere around $25k, then this chart actually seems low. I have to wonder what the “expenses, other transportation” part covers though – seems like a lot unless at least one member of the household is taking public transportation every day, which I know doesn’t happen in the average household.
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I’m not an American nor do I live in the US, but books being my only real extravagance, I spend a fair amount of money on them. I don’t have exact numbers but probably spend like $100 US on books every few months, and have a running list of books that I want to buy. Then, occasionally, I will buy single books that bust through that figure right away; reference litterature tends to be anything but cheap! In my professional field (computing), it’s very easy to spend $50-$75 on a single paperback-bound reference book and they are usually NOT available in libraries, or are so only in very old revisions that are completely out of date by the time you get your hands on them.
I use the public library, definitely, but there is something to be said for having reference litterature that you can turn to at any time, make annotations in, and so on. And to me, with many books, that’s worth the cost of buying a copy of my own.
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Regarding books — we fold them into “entertainment” or “personal play money” in our budget, depending if they’re for the household or for one person individually. We’re both avid readers, and constantly reading new books… from the library. I’d say we spend under $60 a year for books, aside from books we want to own that we request from family for Christmas, etc.
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Wow. We are so far off this map it isn’t even funny! Our average income is about the same, but for 8 people living on 1 income. There’s no tobacco or alcohol expenses, but our cash donations are a full 15% of our income. Working at home our transportation is a fraction of average, as is our apparel, furnishings, etc. Because we homeschool, our schooling and books cost is higher. We have no health insurance, so that outlay is much smaller, but our medical expense is also lower. Our car is paid for.
The biggest difference I can see off the top is food. Americans are so lucky to only spend 12% of their income on food! France is more like 20%, the rest of Europe runs at least 15% on average. I’d say our family averages close to 18%, but we have committed to an expensive route, not choosing the least expensive Standard American processed food diet.
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I don’t track books separately – I have a certain amount of “non-bill/non-savings” money and I use that however I want. I’m willing to bet it’s more than $118 a year though – I use paperbackswap (not free, but much cheaper than new), I work in a library and I trade books with friends quite often.
Transportation costs: I get a lot of flack for living so far from where I work (1 hour on the interstate with almost no traffic), but for my husband and I it’s the best choice. Our jobs are over an hour apart from each other, and we made the decision to live closer to his because we want to be close to my stepson. I easily make twice as much money as I would if I looked for a job “up there”, so I’ve never considered looking for another job.
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I’m surprised that there isn’t a pets category of spending. Would that fall under misc? I spend an average of about $150 a month on food, pet sitting and vet visits on my dog.
Also, I agree with Matt @#3, I wonder what would fall under other transportation. I take several flights a year to visit family. At $350-900 a pop, that adds up quickly! The high transportation spending is not that surprising considering an average of 1.9 cars per household. You add up insurance, one or two car payments, gas, parts and repairs, oil changes, tolls, registration, etc. – that could easily get up to $725. I think the take away is that cars are *expensive*!
And my book spending is definitely pretty low because of the library! Saves on entertainment costs too with DVDs to borrow.
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@JD, The reason taxes aren’t included is because the Consumer Expenditure Survey is exactly what it’s name implies and nothing more. It’s to analyze spending habits, taxes are an entirely different animal than spending.
@Matt, Keep in mind that “reading” does not just cover books. Magazines, newspapers, and other forms of reading would be included here also. As for your point on transportation, keep in mind that this is the “average” consumer. Someone in the middle class may buy a $25K car every 4 years, but someone working min wage is more likely to still be driving the beater they bought in the 90′s, or even just taking public transportation. The same applies to what Allison said about flights. She might spend several grand a year on air travel, but there are tens of millions of people in this country who have never even been on an airplane.
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I use the public library for books – but I probably spend around $100 a year on magazine / Sunday newspaper subscriptions. Very interesting post.
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J.D., thanks for the Stats Can link. It’s interesting that Canada goes by “household” whereas the US data above goes by “consumer unit”. (2.5 people? really?)
It’s interesting to see the difference. For example, in 2007 Canadians spent twice as much on books, less on healthcare (for obvious reasons), more on transportation, but less on housing. I’m not sure how the taxes measure up.
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Mint.com provides regional spending information, but only comparing you against other Mint.com users (who might be more financially savvy than your average American).
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We spend next to nothing on books, and use our public and university libraries almost exclusively, and this is with three kids and one graduate student. Then again, my husband is a librarian…
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I’m not able to provide a link but I recall reading somewhere that a large percentage of Americans never read a book after they finish high school. That group would obviously pull the average-book-spending number down a good bit. It could be that those who do buy books regularly spend far more than the average number being cited in the analysis.
Rob
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My spending on books is probably pretty close to average. My wife and I use our public library pretty heavily. (During the summer, we ride our bikes to the library with our kids on the weekend) My wife likes to read romance novels which are pretty cheap to buy (I think they average 2 to 3 dollars for a paperback) and she trades them back and forth with her sister and mother. They are really a very cheap form of entertainment. I’m more of a sci-fi reader and like to buy my books in hard cover, but I probably only buy two to three books a year that way.
We don’t subscribe to any magazines or newspapers. I do get a couple of trade magazines for “free” that I read with my IEEE membership. Most of the articles that I read are online.
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Are the transportation costs really that surprising? When you factor in the cost of buying a car, gas, routine maintenance (oil, tires, belts, brakes, etc) and unexpected maintenance (oil leaks, break downs, etc), insurance, taxes, licensing and fees then multiply by 1.9 (the average # of vehicles) and I think $725 is pretty good – LOL! I didn’t even factor in financing/interest costs since most people have loans on their cars. Cars are definitely a luxury!
As for reading costs – I’m not sure $118 covers delivery of my local paper each year, much less what I spend on other reading material.
I’m pretty sure the average education, apparel, and personal care costs are much higher than what we spend in those categories. And we spend nothing on tobacco despite living in the capital city of cigarette making.
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I don’t think $725/mo on transportation is necessarily out of whack. It depends. If memory serves (which it might not
), 2007 was a pretty bad year for gas prices. For people living out in rural areas or further in the suburbs, it’s not always possible to optimize transportation in a way that makes tangible difference.
Then again, for this argument to be fully supported, I’d need to see the breakdown of location for the “consumer units”.
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I’m so sad that the average American family spends more on cigarettes than on reading. I was recently driving cross-country and spent one day (Eastern Washington and Oregon) asking in each town I stopped whether they had a book store. I asked at gas stations, rest stops and convenience stores. Generally the towns did not have book stores or the person I asked didn’t know. Only when the population of a place reached about 40,000 was it able to support a book store. One nice note, though, was that many places had used books for sale or book exchanges.
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I spent a total of 0$ on books in 2008 b/c I just go to the library 4 blocks away and check them out, and read magazines. My wife and I enjoy sitting down on the flr one lazy afternoon and thumb through mags at Barnes & Noble and Borders as well. It’s so fun, and it’s so free
In 2009, I spent $16.25 after tax on a vampire book called New Moon b/c we were on our way back from Italy, and were bored out of our mind.
Books take up a lot of space, and much of what you can read can be done so on the internet, and for free at the library.
Where I spend most of money is dining out, which can get quite expensive. I need to cut that down.
Rgds,
RB
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Call me cynical, but tobacco and alcohol seem awfully low for the average American!
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For someone who lives in WDC area the commute costs seem about right. I easily spend 150/mo just taking public transit to work. And thats only my work costs. Of course I dont drive my car as much, so my gas and normal wear and tear expenses have drastically decreased ($10 gas in the car lasts a month)Of course there is no way to account for the price difference for the areas that we live. I know living this area is far more expensive than living in a less metropolitan area.
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Regarding transportation costs, you’re right JD $725/month is expensive!
I live in a big city and have a car. My monthly gas bill is $150, my bus pass is $55 pre tax, and I guess i can add on tolls, tickets, and maintenance at $100/month…. so that total is $300.
Maybe transportation is cheaper in a big city.
Rgds,
RB
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If you are looking for regional comparisons, Mint.com (clark howard waxes their car about once a month) is a free online expense tracking site that exchanges advertisements for financial services (not in-your-face by any means) to allow you nearly real-time expense tracking, if your bank is supported. You can go to your pie chart page and click down below and compare yourself nationwide or against a number of other areas, states, and I think even cities for your spending at a particular vendor or entire category. Pretty cool stuff to compare what I spend to other people living in my area on certain items.
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Very interesting. I’m saddened that only 1% of expenditures was on education. OTOH, I’m curious about where items like child care are categorized. For those of us who have kids and work outside the home, child care makes up a significant portion of our monthly expenditures. For a while, I paid far more for childcare than for my mortgage.
And as for mortgage, it would be very, very intesting to look at how the housing portion of the expenditure changed between 1999 and 2006.
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The key point is this is a chart of averages. I think $118 is a good reflection of book spending when looking at the averages. That means spending around $20 on a book every couple months. I read a lot of info from the internet and while I like to read, I maybe spend $40/year.
Smoking surpised me until I reminded myself it’s an average. So that $338/year accounts for those of us that don’t smoke. Smoking will either be $2-3,000 or $0, depending on smoker or non-soker.
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My friends would consider me an avid reader. average 2-3 novels/month and I get all of them from the Library or yard sales. I won’t spend more than $2.00 for a book. But our newspaper subscription runs almost $80/year, so I guess that puts me right at the average.
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I spend about that or more on books, but I also spend way less on other things like going out (I don’t spend any where near the average of $275/mo on eating out – maybe $50 in a busy month – I prefer to have folks over and cook) or going to movies, clothing, etc. I was given a Kindle last year for my b-day (group gift for the “big 40″)and have found lots of classic free books to read and the $9.99 price for even the newest book actually has meant I’ve spent less this year. And, I still use the library too!
I do own a car, but it’s 6 years old and I plan to drive it a long time – nothing wrong with it. I’m lucky to be close to a bus line that takes me into the city for work, so that makes a huge difference in the associated costs of the car – in a busy month, I’ll fill up twice, but usually it’s only once, and insurance is lower since I drive less than 12,000 miles/year and it spends more time in my garage than out.
I agree, there should be a category for pets – I have cats and a dog and I spend about $200/month on them.
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Where is the slice for credit card debt payments? Or does the chart represent what went on those credit cards?
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JD,
Did you ever get into Dungeons & Dragons and all that fun stuff back in the 80′s? If so, remember books like Monsters Compendium and so forth? I remember that time when I had the book addiction, and would save for my allowance for month just so i could get one of those beautiful hardcover books. Nothing beats the fresh smell either. They still have those books in comic book stores, but now they cost $29.99 vs. $11.99.
I think it’s actually great you love comics and stuff. They are relatively cheap entertainment items, and provide a lot of pleasure. If only i could have that want back in my life. The more we enjoy, the more enjoyable life is.
Rgds
RB
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I did know that US citizens, do not spend much on holidays or vacations…
but I did not know that they are spending nothing???
It is me or the chart and nobody is missing money spend on holidays?
Best, Roman from Switzerland, in europe, the old continent.
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Mint.com has a great gadget under the Trends category… Just below the piechart is SpendSpace; you can click on any category of your spending and compare your spending to the average spending in the location of your choice.
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I bet I don’t spend all that much on books. I used to count books as one of my larger entertainment categories, but I don’t have the shelf space. If I’m not going to read a book more than one time, I’m reading it from the library. I can almost always get anything I want to read through the local University which is tied to most of the state universities and can get books in a couple of days.
The biggest reason I don’t buy books isn’t the cash so much as the shelf space. My house has 5 bookcases in it already, and each is packed. I don’t buy new books because I don’t have good places to put them.
A book I’ll read again and again? Sure, I’ll buy it, and I’ll make a space for it.
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To Michael, Post #4
I know what you mean about the computer books being expensive, I’m a computer programmer. That being the case, why not find all your resources online? There’s a plethora of free information on the web. Sometimes I can find whole ebooks for free.
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I’d be willing to bet there’s a big difference between urban and rural for the transportation costs. Since we live in a city, I take the train and DH bikes to work, so our monthly transit costs are less than $100. But we do have a car, and driving to visit family in rural areas gets pricey. I presume that living in the country can necessitate two cars for many families, with the accompanying increase in gas/insurance/maintenance costs.
As to book spending, ours is much higher than that, but we’re both grad students, so the pricey books (we buy the ones we can’t check out from a library somewhere) can go under “education” costs. The rest should go under “entertainment”, I think. $118 per year covers our magazine subscriptions. Used books and such probably account for another $100-200 annual spending for us.
We (reluctantly) spend roughly 1% of our income on clothing… I wonder what “services” includes in that category? Dry cleaning?
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There are some things that are grouped oddly. Reading the source data pets are included under entertainment (but not books). Expenditures when traveling are not included (why?). And where is retirement contributions? Is that insurance/pensions? Not clear from reading the article. Regarding the alcohol possibly tobacco as well) does look low but again this information is self-report via diary. Most people report honestly but there can be biases in self-report for areas that have value judgements (people estimate down).
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JD, to answer your question:
This past year, I spent $493 on books.
(And this was with a resolution to use the library more — like last night, wherein I checked out 5 books for the next couple of weeks).
On clothes – $368.26.
You are not alone.
Re: car costs, that seems entirely average to me. Assume a car loan of $400, insurance of $100 per month (I spend $111 per month in an urban area, with a good driving record), $200 in gas, $50 in maintenance, and you’re there. This is why car loans can be such a drag on a budget.
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I for one always wonder about healthcare. I’d like to know the real average cost of health insurance. We as a family have always had great employers but paid a lot more for health insurance than it seems most people I know. In some ways its prepared us for the “real world” but I still think a lot of people live in la la land when they are asked to pay $30 bucks more a month than the $100 or so they do pay and balk at it! Oh and while I’m at it, why is a family a family no matter how many kids you have? I resent paying the same family costs for 1 child as someone with 4 or more!
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Mint.com also has useful comparison data for some selected cities in USA.
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Interesting and weird graph. I normally roll my eyes at all the comments rushing in to tell us loudly they could “never give up boooooks” but that percentage IS really low. Especially when placed next to donations. Miscellaneous also looks insanely low to me too, especially if that’s supposed to cover travel/vacations as well as gifts and other bits and pieces. Alcohol also looks low to me.
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Education is a wierd category there, for sure. Averaged out, it’s pretty small, but most full-time students spend something like %50 on it, I’d guess (depending on programs – Law school, for example, costs more than my other expenses combined).
Also not sure if textbooks fit there or under “books”. If they fit under education, that book figure is actually high for me. I mostly use the University Library (I’d buy a lot more books if I was stuck using the public one).
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To paraphrase John Hurt in the movie The Elephant Man,
I am not a consumer unit, I am not a consumer unit, I am a human being!
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Does the transportation category include airplane tickets or are those in the vacation category? (I can’t enlarge the graphic on the work’s filter.) That might explain the high level of expense.
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I used mint and pulled up data from January 1 until today to see what we spend our money on. Besides bills like rent and utilities, our next highest expense is food and eating out.
I also love to order books through half.com. Many of them I have read at the library, so I go ahead and get my own personal copy.
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The Department of Commerce hires contractors to meet with families once each quarter.
There are supposed to be 5 interviews, each takes 1-2 hours. We were interviewed TWICE by different people – but the second interviewer had detailed information that had supposedly been gathered in prior meetings. It was all fake; we had not given that information. The contractors took our base data and added whatever they felt like.
I think the numbers are heavily skewed by the interviewers putting the answers they think are correct – making up data – which is then presented as “the economy”.
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I know I spend more on housing, including utilities and supplies, in-home food and insurance (life and health), but less in most other categories (alcohol, tobacco, clothing, transportation and education). This actually surprises me, as I live in a modest-to-nice home (no mansion), on which I put 20% down and have a relatively low interest rate and I’m fairly young and in good health. I’m curious where others are getting their insurance policies and how their housing expenses are so much lower.
I am also puzzled by the ommissions on this list. Where are vacations? Where are pets? Where are children’s college contributions (or is that education)? Where are debt repayments (credit cards and loans)? Where are holiday and birthday gifts for friends and family (or is that miscellaneous)? Does anyone have any thoughts? It would certainly be helpful to have definitions for each of these categories.
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I don’t spend much money on books (unless you count college textbooks, then we probably spend about that much, but buy used/International editions)–we buy travel books when we go on vacation (think Lonely Planet), as well as cheap paperbacks from Half Price Books. My last trip, I bought 3 books for less than $4. We are both grad students and have good access to library reading material, as well as less fun reading material, and not tons of free time to use up. Excluding college texts, I would say that we probably spend ~50-75$ on books per year.
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I don’t think tax is included ’cause the government is too embarrassed to say they took most of your money for the year. For most people, the largest expense is taxes. That does not only mean income tax. There’s also sales tax, property tax, gift tax and inheritance tax.
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I don’t track my book spending separately… But if I take the last few weeks as average, I would estimate about $1,000 a year. That’s a good chunk out of a household income of $30,000 or so. But… I spend about $20/year on clothes (all second-hand) and maybe $20/year on alcohol (just on holidays), with no tobacco use anymore. I guess I justify it cause I read so much, about a book a day. And the library is bad for absent-minded people with a lot of books, like me, cause I always keep them past their due date and end up with a ton of fines. And I get back a couple hundred dollars each year by selling a few hundred books; I obviously can’t keep them all!
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I suspect I’m on the far end of the bell curve when it comes to books, and I’ve even been buying fewer in the past few years.
I’m a university librarian, so I have easy access to ILL and use that to get books that I’m not sure of, or that I know I’ll only read once. But I do buy books that I know I’ll read multiple times, that I use for reference and instruction for my art, and for books that I want to send a message to the publisher about – to let them know there’s a market for them so they will publish more books like this (I also recommend them for purchase at my local library).
Which brings another thought to mind – does the “books” category count books purchased as reference, or just for entertainment reading?
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$700/month on travel is NOT outrageous. My wife and I do not fly, but we own two cars; one car has an auto-loan, so that’s a couple hundred a month right there. Thanks to the recession I now work even farther away than six months ago, so I’m easily spending $75-$100/week on gas. It adds up fast!
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