Money’s tight for just about everybody right now (thanks, inflation). As you look for ways to cut costs, you’re probably wondering, What are the average American’s monthly expenses? Is everyone spending this much on food?
News flash—everyone’s situation is different. After all, if you have kids, you’re guaranteed to spend more on milk and cereal than Phil and Janice, the retired couple next door. (Phil’s more of an oatmeal guy anyway).
There are folks at the Bureau of Labor Statistics who keep track of what Americans spend on everything from cereal to housing. And they say the average monthly expenses for an American household add up to $5,577. That equals $66,928 per year, which is crazy close to the average annual income of $78,743 after taxes.1
But if you’re budgeting and looking for ways to cut your expenses, don’t settle for average expenses.
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In school, in life and in business, being above average is great. But when it comes to household expenses, below average is where you want to land. Yep, you’re shooting for a D-minus. Don’t settle for normal, because normal is broke, and the average, normal American spends hundreds of dollars a month on credit card and car payments. No thank you.
Let’s dig into the numbers a little more and see how household size affects average monthly expenses.
What Are the Average Monthly Expenses by Household Size?
Mom, Dad, two kids, one dog, a house and a picket fence—the American Dream. But that dream comes with a pretty hefty price tag.
- The average monthly expenses for a family of four range from $7,333 to $8,595 (depending on the ages of your kids).
- For single folks, the average monthly expenses are $4,009.
- For married couples with no kids, monthly expenses are $6,337.2
No surprises here, right? The more people you have living in your home, the more you spend. But where’s all that money going? Let’s take a look at the 10 major categories of household expenses. And remember, these are averages, so they could vary a lot based on the size of your household and the cost of living in your part of the country.
What Are the Main Household Expenses?
The 10 major categories for household expenses and their share of the total expenses for average Americans are:
- Housing: 33.8%
- Transportation: 16.4%
- Food: 12.4%
- Personal insurance and pensions: 11.8%
- Health care: 8.1%
- Entertainment: 5.3%
- Other expenditures: 4.2%
- Cash contributions: 3.6%
- Apparel and services: 2.6%
- Education: 1.8%3
Keep in mind, these are not recommended budget percentages. They’re what the average American spends. But you don’t want to be average, right?
Next, let’s dig into what each expense category includes and break them down by the average monthly cost for each. Plus, we’ll give you some ideas for how you can come in below average for some of these costs.