Budget Throwdown: The Average American

The United States Bureau of Labor Statistics publishes the Consumer Expenditure Survey, an excellent collection of data tables that cover, in excruciating detail, the spending patterns of the US population sliced and diced by every possible variable.  In 2012, over 120,000 'consumer units' (households, essentially) were surveyed.  These data are self-reported... so do take them with a grain of salt.

The information in this publication identifies where the average American spends their money, which can serve as a basis of comparison with your own budget.  While everyone's situation is unique, the dominant categories may offer the most room for improvement.

The Average American

In 2012, the average American 'consumer unit' spent $51,500.  Here's how:

Housing and transportation account for one-half of total expenses; food, healthcare, and entertainment comprise the next quarter.

(In this graph, 'everything else' includes apparel and services, education, personal care products and services, cash contributions, smoking supplies, and the final catch-all 'miscellaneous'.  To learn more about which expenditures fit into which categories, see the BLS Glossary.)


Housing costs account for one-third of expenditures ($16,900/year, $1,400/month).


Transportation costs account for one-sixth of expenditures ($9,000/year, $750/month).


Food costs account for one-eighth of expenditures ($6,600/year, $550/month).


Insurance and pension costs account for one-tenth of expenditures ($5,600/year, $470/month).


Healthcare costs account for one-fifteenth of expenditures ($3,600/year, $300/month).


Entertainment costs account for one-twentieth of expenditures ($2,600/year, $220/month).

Everything Else

Everything else accounts for one-seventh of expenditures ($7,200/year, $600/month).

*cash contributions include donations, child support, etc.


Look carefully again at the old Financial Independence graph:

Now take a look at the trend in the American savings rate:

If you want a retirement like your great-grandparents may have enjoyed, you better start saving like they did.

Use a tool like Mint.com to start tracking your own expenditures.  Then, take a look at your own category breakdowns and start thinking about where you might be able to trim some fat.

Tomorrow, we'll consider another potential budget.