How Americans Spend Money

smartcard2Last week, Jeff blogged about how much money top athletes make, but what about average (typical; normal) Americans?

How people spend their money tells us a lot of about them and a recent article in Time magazine lists how average U.S. households spend their money.  A household includes everyone who lives in a home, and it’s often used to mean the same thing as “family,” although a household does not need to include people who are related by blood.

In 2007, an average U.S. household made about $50,000 in income, and this is how the household spent its money:

– $1,900 for apparel (clothing, shoes, etc.) and related things

– $2,700 for entertainment

– $2,800 for health care, with about $1,500 going to health insurance

– $6,100 for food

– $8,800 for transportation ($2,200 for gas, $1,000 for car insurance, and $500 for public transportation (such as buses, trains, and the subway))

– $17,000 for housing ($10,000 for rent, $3,500 for utilities (such as electricity and telephone service), and $1,800 for furniture, appliances (such as refrigerators and ovens), and other equipment

Remember that these figures (numbers) are approximate (not exact) and they are for an average household, with many people living more modestly (spending less) or more extravagantly (spending freely or a lot more).

Based on your experience, are these figures in line with (similar to) household spending in other countries?  Do Americans spend significantly more on clothes, entertainment, health care, etc. than other countries?

~ Lucy

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26 Responses to How Americans Spend Money

  1. Peter says:

    Dear Lucy ,

    Very interesting . Wondering ,if US farms, with PENS,cattle,and farm animals, are included in the aforesaid figures.It seems like the cost of living is pretty high in the US ,but still way cheaper than here specially grocery and attire(clothing) cost.

    I suppose what makes a big difference between US and Canada is the health care cost which is free here unlike Us with all monthly insurance fees and co-pays.I believe the free health care system gives Canada a higher hand and makes it a better place to live.

  2. Julio says:

    Very interesting piece of article, Dr. Lucy, even though is related to how the average income is spent in the USA, regardless the different states, social status, etc.
    I think in my country, Spain, several percentages could be pretty similar, however, an average Spaniard would spend something else -I would say quite a bit more- to go out for entertainment and restaurants, bars and so forth. Maybe this is our most important characteristic.
    Best regards from Spain,
    Julio (Jack).

  3. Vania says:

    Wow! It’ s sounds a lot of money! I’m sure that we spend less money, in Brazil, than the USA. In fact, I’m also not sure if the rsults of the research is about the total that people spend in a year. But I supposed that it is. Well, even though this amount has been spent monthly, I think that american should learn how to save some. every month, little by little and then at the end of the year, they would have some left on the bank.

    Have a nice day! And know that you are great!

  4. emiliano says:

    If I could get 50.000 usa dollars by year, I´ll be happy. But I´m a retire and I know this kind of people get less money that
    the one who is working.

    But here in Spain, we have such a lot of youngers and not so young, well prepared that get only about 1000 euros by month, that there is a word to call this workers “mileuristas” because this is the middle salary that thousands of people get by their work.
    1000 x 14 = 14.000 euros by year.
    By this reason is quite difficult to me to establish a comparison between the two countries.
    Even more, there are more people here who get less money than that, may be about 800 euros by month…..more difficult to
    establish a good opinion. What is evident is that the average there is much better than here….so that´s the real truth.

    But if look to your average my opinion is: Too much for transportation and housing, not so much for apparel, food depends of
    how many people are living, and the other thing more or less normal.

    I repeat, these figures doesn´t fit with our living style here in Spain.
    Now that I´m doing all housekeeping and know everything about how much a house needs, I can say that I spend about nearly
    the third part of the amount we are talking about.
    And we live well now, because everything is paid and no childrens around. Here in this country there are millions who live with very few euros
    and have children to feed every day.
    No way with your country Lucy. Thank you with the information.

  5. rodrigo arellano says:

    A lot of money but it depends on the family’s income and the inflation rate, in Venezuela most of the expense goes to food which price rises every week, our inflation rate is 15% and is expected to end 25% by december

  6. Peter says:

    Now that I think about it ,The furniture and appliances prices a bit steep here in Toronto. Definitely, way higher than the priced offered in the US.

    But ,all things considered, living in Us is more fun with all its over crowded mega cities. I like the hustle and bustle of big cities like Big Apple( New York) and so on.

    USA is way more crowded than Canada with lots of big cities unlike here with a handful of big cities and numerous whistle-stops in between.But ,It is just me. Some prefer the piece and quiet over hectic and crowded.

    I heard ,in New York the cost of living is exceedingly expensive and what make it worse is the city highway tolls.

    Anybody knows which countries are the most and the least expensive ones.I suggest we take it out to Jeff.Probably, He knows .He is quite encyclopedic.

  7. francesco says:

    such a lot of money! In my opinion Americans spend less in clothing than Italians and also health insurances are very expensive. Well, in Italy we have public health care system so we are supposed to save money and in fact this is real, even though we have to pay co-pays quite often for any kind of treatment.. bad thing.. Of course, U.S. politicians are changing their view about private health care system and this is great: it’s a shame that if you can’t afford a good hospital you’ll be possible not to have good doctors and so forth..So we’ll see in the future if Americans have understood how to save more money for health and put more for cloths…!
    Anyway love America, Jeff and Lucy! Thanks

  8. Fernando says:

    Dear Lucy,

    Here in Brazil the people spend a lot of money with entertainment, such as beach and pool club. It’s because the weather here is very hot all year. People that live in interior of country spends money here is with travel to littoral (cities with beach).

    Thank’s and congratulations for this excellent text.

  9. Daniele says:

    Hi! to everybody
    Based on my own experience, I would say that those numbers are in line with our life style here in Italy.The bigger difference is probably that we do not have to pay forhealth care insurance.
    I must add though, that it does not fit with my own life style.I spend less than that.
    Being a owner of three cats, I spend in cat litter and food for them.
    And being a husband I spend money in chocolate for my wife.

  10. Marek says:

    Lucy, just wondering if $50k per year mentioned by you is gross or net income. Could you clear things up? Anyway I am really curious what average percentage of your gross income do you pay in taxes, social security, etc. In other words, what gross salary would we need to have in order to have a net income around $50000 a year in US?

  11. Peter says:

    Nice Lucy ,

    You got 10 hits already.Pretty interesting topic you got here.The inflation rate per fiscal year is 3 percent in Canada. How about in US?

    Another lonely day is closing in. Sometimes I feel like, I m a social outcast, totally marginalized. I know it has nothing to do with the topic in hand just getting off my chest. I believe, The most expensive city is Tokyo and London is second to Tokyo. And our bronze medallist is Big Apple. I read the rating somewhere before, but now it is a blur . It is always nice to know.You know what,I have a tight relationship with my Ipod and EslPod. On average,I listen to the program 4 hours a day and spend another one hour or two enjoying Lucy’s canon.I guess I am holding a record among my fellow cyber classmates.
    My Ipod is always on me ,Even when I m driving down the road I don’t listen to music ,Instead I listen to the Their dialogs and repeat right after Jeff and Lucy ,word by word. ( take it from me guys, it is the best accent reduction method ever)

  12. Peter says:

    With my Ipod as well as EslPod

  13. Peter says:

    Good show Emiliono ,

    I like the idea . Using Lucy’s figures and approximate as a yardstick to check our home town’s expenditures against.Good analysis Emiliono, particularly the conclusion. I am with you on that. The last part ,very sentimental. Accept my sentiment, mate

  14. Peter says:

    It is all blur( thanks to lucy)

  15. Peter says:

    Don’t get me wrong folks , I Have a bunch of guy friends . I am talking about my better half who is still none.

  16. Nastia says:

    As for Russia I can give you example of spendings of my family.
    We are, i would say, middle class (or a little lower), we are: 2 children (3 and 5 years old) and 2 adults.

    So, we earn about $30000 a year:
    $7500 – food (only at home, not restaurants),
    $1800 – gas,
    $1900 – paying for parking,
    $390 – car insurance,
    $1980 – utilities (electricity, water, internet, heating…),
    $250 – mobile communication,
    $1200 – $1500 – clothes, footware,
    $900 – health,
    $10000 – $12000 – savings or some large purchase.

  17. Dr. Lucy Tse says:


    Let me see if I can clarify a little. The article didn’t say specifically whether $50,000 is gross (before taxes and other required government deductions) or net (after taxes and other deductions), though normally when people talk about their annual (yearly) income, they mean their gross income, so I would guess that this is a gross figure. How much an individual pays in income taxes is not an easy question to answer because U.S. tax laws are very complicated. The tax rate ranges from 0% income taxes for those who earn under a certain amount to about 39% for those who are in the highest tax bracket (category). A household that earns $50,000, depending on the number of people in that household, might be considered middle class and fall somewhere between those two extremes.

    I hope that helps a little by giving you a little context (surrounding information/situation) to better understand these numbers.

    ~ Lucy

  18. emiliano says:

    Thank you Peter, I haven´t any children around because my three daughters have their own lifes, and they don´t want to have any?. The way that children are treated, in my opinion isn´t good for them and for the parents I think. So, I understand perfectly well what my daughters thinks about
    the matter.
    But talking about money, no body may understand what is happening now in this poor country where nearly 19 per cent of workers are without a
    work to do, nearly four millions, and the amount is increasing.
    So who is going to ask for a better salary?. No body, because if you ask for, another worker should be in good disposition to do it for less.
    “Mileuristas”….that´s the word.
    So, 50.000 Dollars?….35000? euros…..? a normal employee?. Not here of course.
    A couple needs one salary to pay the house´s mortgage and the other salary to survive, suposing the two of them are working.
    If there are children beside, they have to survive with about euros to eat, dress, pay electricity, water, schools, ……..everything.

    Nartia, you said nothing about mortgage or rents?
    Because what you say about your way of living and charges are in the same way than here, more or less, but what about paying a rent or a mortage?.
    I have not mortage, no children, don´t go out to restaurants, don´t travel any more as Cuca is ill, no theatres, and so on…..and spend about
    12.000 euros a year or little more, saving about 6000 for bad times. In this terms what is happening with a family of four or five who has to live with once they have paid for the house rent or mortgage?.
    I don´t really know. And of course they can´t save any euros.
    Now our president is going to increase the taxes…..? Can anybody know what is doing this fellow?. I don´t.

  19. kobe.Su says:

    Dear Lucy, when you talked about $8,800 for transportation ($2,200 for gas, $1,000 for car insurance, and $500 for public transportation (such as buses, trains, and the subway)), what does the rest 5,100 go to? travelling?

    if thoes figures are yearly spending, then it’s incredible for me to believe how little US average household (must more than one person) would spend on apparel, of course if dont think of the exchange rate. i’ve seen in my friends street clothing store, girls (20sth yrs old to 40sth) would shop for from 500-2000 rmb by one time. and some of them may come around every week. me, myself, at the benifite of buying at original price,(very cost price) i would spend 500-1000 RMB per month, 12,000 for a year for my guilty pleasure. maybe even more.

    m lucky that i dont have to pay rent for the house, my parents bought a studio for me five years ago, it costed them 25,000rmb, now the price already goes up to 40,000 rmb. it was a good way of investment buying apartment 5 yrs ago. and for the same kind i live, 44M2, would takes 1500-1900 RMB for renting, so the total rent for a year would be 18,000 RMB at least plus 1500 to pay for the house renting Co. there’s also 100RMB monthly renting and 5000rmb monthly renting. i think it is pretty worthy for US people spending 10,000USD renting a much bigger house in US.

    in my opinion all thoes listed figures looks less expense than living in Beijing, except public transportation. For most of the Bus, it would only cost you 0.4 RMB no matter how many stops you would take, get up, get off, 0.4RMB if you bought public transport card, you only neet to charge it when there’s no money in. dont worry if you dont have the card with you, it would cost you 1rmb, still cheap. the PT card can also be used for Subway. it’s just frice for Subway is fixed whether you have it or not, 2 RMB takes you to anywhere you want inside the station. i guess that’s the cheapest cost arould the world.

    and for health insurance, it would cost you 2% of the salary per month, and for a certain common illness the Government or insurance Co. would pay a relatively high percentage for the hospital cost. and if you pay the 2% counts to 20 years, you would have the same benifite for your illness cost without paying the 2% anymore. of couse you still have to pay for your own percentage. if i dont know wrong, for common illness, 80% paid by insurance Co. or Government, and 20% paid by oneself.

    and our salary is 13months, not as good as Mr.emiliano mentioned in Spain 🙂

  20. HAMEY says:

    sir can you please tell me the meaning of “IN GOD WE TRUST” written in US dollar.

    thank you for your kind work…

  21. emiliano says:

    A very good question Hamey, because we all know the translation of that phrase, but why is on US dollar or the meaning of that?.
    It should be asked to the first who did the note, I think, as if we Trust in God why we need the money? and so much…..

    Right, a point to you Hamey,

  22. emiliano says:

    Kobe, here in Spain we have two extrapayments, one in July and the other in December. But some years before we have more. In fact I have two
    more. One about company´s profits and another about another thing I don´t remerber why. So there were 15 or 16 salary payments along the
    Now it is only 14 in total.
    The reality now is that we, the workers, have lost some privileges we have some years before.
    I live well because like you I have to pay nothing about the flat, only the comunity charges and municipal taxes. If wasn´t so it´s sure I´ll have problems to survive a little better.

  23. kobe.Su says:

    Dear Emiliano, thanks for letting me know. it’s sad to hear ppl has been living harder than before, i dont know what to say. i hope life can be changed to be better for ppl those who has to wk terriblely hard to survive some day!!!
    And always to keep the kindness, wishes in heart.

  24. xjw0316 says:

    Wow, seems like that Americans do not save to much money in bank or for future days. If we made about 50000 in income, I will spend about 24000 for rent, 15000 for food and clothing and 1000 for saving for my future.

  25. Chris says:

    In my country, the total income is about 60000 RMB(Chinese money) in average, But it is just average, it does not mean we both could earn that number. Being a poor people, I have to pay more money to my food and articles of everyday use, as the goods are expensive relatively.
    I hope you could understand me.

  26. Valerie says:

    Here, in Kazakhstan, our total income is about 2000 dollars per year. You may ask how we can live with this money, and I can answer we can’t, but we live. 🙂 Of course, we almost don’t spend money on entertaining. 🙂 I read, watch interesting movies and walk a lot. It’s almost free… And I must note that all apparel and sometimes food is cheaper in the US than here (paradox) Ohhh…I’m sorry for my complaints. Just want you to know, that you are happy 🙂

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