How Are Americans Spending Their Money?

How Are Americans Spending Their Money?

On average, Americans spend the most money on housing, transportation, and food. That's not too surprising, as these are the spending categories that provide the most basic needs for people. But what do people spend their money on outside of these necessities? Swagbucks looked at data from the Bureau of Labor Statistics to determine how Americans spend their money and how spending differs across different age ranges.

How Are Americans Spending Their Money? - Swagbucks Coupons and Paid Online Surveys - Infographic

What Do Americans Spend Their Money On?

Based on our research, the average American spends $63,035 on living expenses every year. This is how that spending breaks down:

  • Housing: $20,679 (32.8% of expenditures)
  • Transportation: $10,742 (17.0%)
  • Food: $8,169 (13.0%)
  • Personal Insurance and Pensions: $7,165 (11.4%)
  • Health Care: $5,193 (8.2%)
  • Entertainment: $3,090 (4.9%)
  • Cash Contributions: $1,995 (3.2%)
  • Apparel and Services: $1,883 (3.0%)
  • Education: $1,443 (2.3%)
  • Miscellaneous: $899 (1.4%)
  • Personal Care and Services: $786 (1.2%)
  • Alcoholic Beverages: $579 (0.9%)
  • Tobacco and Smoking Products: $320 (0.5%)
  • Reading: $92 (0.1%)

Housing is the biggest expense for the average American, at about 33% of spending. Transportation, which includes car payments, gasoline, and vehicle repairs, comes in second at 17% of spending. How much does the average person spend on food? The answer is $8,169, which amounts to about $157 per week.

Our research team also broke down the data to see how different age groups spend their money and if spending habits change as people get older. Expenses like housing remain a constant 30-36% of expenses for Americans of all ages. However, expenses like health and wellness increase dramatically as Americans age. While the average person under 25 spends just 3.8% on health care, the average American over the age of 75 spends 15.8%.

When it comes to eating food at home versus eating food away from home, people under 25 spend more money on eating out and less on food that they cook at home. On average, Americans younger than 25 spend $349 more on restaurants and takeout than they do on groceries each year. As we age, we tend to spend much more money on food at home. For instance, Americans between the ages of 55 and 64 spend an average of $1,608 more on food to be cooked at home.

How to Save More Money

Nearly everyone could use a little extra cash. Smart spending habits like the ones below can help you reduce impulse spending, save money on your existing expenses, and put extra money in your pocket.

  • Create a budget so you know where your money is really going. Whether you choose zero-based budgeting, the envelope system, or another method, you're sure to find a strategy that works for you.
  • Make your savings automatic. Set up your bank account so that a certain amount of each paycheck automatically goes into your savings account or retirement account.
  • Take advantage of coupons and cash-back shopping. Many stores that you already frequent offer coupon codes to get free shipping or save money on your purchase. Some will even give you cash back just for shopping with them!
  • Wait 24 hours before making an unnecessary purchase. This will give you time to decide if you truly need it.