What are Americans actually spending their money on? Pew released a study in 2017 that broke it down, and while nearly half of Americans are over-spending, their money isn’t going where you might expect an over-spender to throw it. Here’s where the typical U.S. household is spending its money.
Now more than ever before, Americans are spending a huge chunk of their monthly income on housing. Affordability is at an all-time low. Senior economist at BMO Financial Group, Sal Guatieri told Reuters that on a scale of 1 to 10, the current affordability rate for housing in the U.S. is 7. That isn’t limited to people with a mortgage, renters are feeling the crunch too.
According to the Bureau of Labor Statistics, transportation expenditures in the U.S. went up 5.8 percent in 2017. More people were buying cars, up 11.6 percent, with high consumer confidence. The price of gasoline went up 3.1 percent.
As it turns out, Americans are still eating at home more than they are out. Total spending on food increased by 7.3 percent. Eating at home expenses went up 7.8 percent while eating away from home went up 6.7 percent.
Pensions and insurance: 11%
The Social Security payroll tax takes up the majority of this budget. Americans are also spending their money on life insurance and contributions to their pension.
Americans spent 6.9 percent more on healthcare, jumping even more from 2016’s increase of 6.2 percent. The majority of this increase is attributed to people spending more money on health insurance.
Miscellaneous expenses stay at a reasonable low.
Did you guess that the average American only spends 5% of their budget on entertainment? It goes to show that the over-spending gap is attributed to inflated living costs, instead of games and leisure activities.
Apparel and services: 3%
Not much here!