Image source: Getty Images
Everyday expenses add up quickly for individuals and families alike. Did you know the average U.S. household spends over $5,000 every month? Find out what Americans are spending their hard-earned money on and see how your monthly spending compares.
Life can get expensive, and sometimes it's hard to trim necessary costs. If you feel like most of your income is being spent on bills and essential expenses, you're probably not imagining it -- and you're not alone.
Inflation is one factor that could lead to you spending more on products and services. The U.S. Department of Labor recently noted that the Consumer Price Index, which measures the change in prices for consumer goods, rose 7.5% from last year.
This is the largest 12-month increase since February 1982.
The average household spends $5,111 each month
So how much are Americans spending every month? We recently examined the average monthly expenses for American households.
According to the U.S. Bureau of Labor Statistics, the average U.S. household's monthly expenses total $5,111. That works out to $61,334 per year.
This total spending includes costs such as housing, transit, groceries, healthcare, dining and takeout, personal care, and education.
Housing and transit costs are the biggest expenses
For many individuals and families, essential expenses like housing and transportation take up a large part of their monthly budget.
For the purpose of the above survey, housing costs include shelter, utilities, furniture and appliances, household operational costs, and housekeeping supplies.
Transportation costs include vehicle purchases, insurance, gas and oil, maintenance and repairs, rental and lease fees, vehicle finance charges, and public transit costs.
Here's a breakdown of some stats:
- The average household spends $1,784 per month on housing costs.
- The average household spends $819 per month on transit costs.
- Housing costs make up nearly 35% of the average household monthly budget.
- Transit costs make up 16% of the average household monthly budget.
- These costs combined make up 50.9% of the average household monthly budget.
The average American household spends $2,603 per month on these expenses -- just over half of their total monthly spending. That's a lot of money!
It's worth noting that housing and transit costs can vary greatly depending on what part of the country you live in and your personal and financial situation.
How does your monthly spending compare?
How does your monthly spending compare to that of the average American household? There may be ways for you to trim some of your expenses. Here are some tips that can help you spend less money each month:
- Set and follow a budget. Budgeting is a great way to manage your money. As you learn to set and follow spending limits, you may be able to free up some of your income to make room for other expenses. If you're a budgeting newbie, check out this first-time budgeting guide.
- Track your spending. Many people have no idea how much they spend every month. If you don't track your spending, you may be spending too much money. You can use budgeting apps to see where your money is going and as you learn more, you can adjust your spending habits to reduce unnecessary purchases.
- Use coupons when shopping. You may be able to spend less the next time you shop in-store or online. By using promo codes and coupon codes found in coupon apps, you can reduce the amount you pay at checkout.
- Price shop. If your monthly spending is getting out of hand, now is a good time to price shop. Compare prices for car, rental, and homeowners insurance, and utility providers. You may be able to trim some of your spending by going with a different company.
You may be able to make small habit changes that help you spend less money each month. For additional money-saving tips, look at our personal finance resources.
Earn up to 5% back and wipe out interest until 2023
Our in-house credit card expert loves this top credit card pick, which features a 0% intro APR until 2023 that can help you avoid interest charges on new purchases or pay off debt faster using simple balance transfer strategies. Plus, this pick packs in an insane cash back rate of up to 5% with no annual fee. In fact, this card is so good that our credit card expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
