Knowing where we spend our money is the most important step for knowing where to begin with saving. So, where does our money go?
The 2018 Mid-Year Consumer Expenditure Report from the Bureau of Labor Statistics (BLS) looked at the average spending of surveyed participants between July 2017 and June 2018. The report shows that Housing, Transportation, and Food spending are the three areas where we spend the most money.
The average income of participants surveyed (pre-taxes) was $76,335.
The study reports that from July 2017 to June 2018 average spending was $60,815.
Housing, Transportation, and Food spending made up more than half of the average spending.
When it came to food, almost as much was spent eating outside of the home as was spent eating at home (just over a $1,000 difference).
Food spending at home increased by 7.9% compared to the previous mid-year timeframe, July 2016 to June 2017. Food spending outside of the home increased by 4.2%.
Entertainment increased by 14.9%. This was due to an increase in other entertainment supplies, equipment, and services.
Education spending increased by 9.7%. Why the increase? Elementary and high school tuitions costing more, as well as interest charges on student loans.
The Actual Numbers
- Housing: $20,001
- Transportation: $9,735
- Food: Close to 10% of spending, coming in around $7,869
- At home: $4,445
- Eating out: $3,424
- Healthcare: $4,924
- Entertainment: $3,379
- Education: $1,505
- Apparel and Services: $1,850
- Cash contributions: $1,840
- Personal Insurance and Pensions: $6,904
- Pensions and Social Security: $6,474
- All other expenditures: $2,808
Some of these expenses might be out of our control (to an extent) such as healthcare. However, spending on food outside of the home and entertainment is something we could probably modify.
Take eating out for example: Let’s say you spend $65 per week on food outside of grocery shopping, that’s more than $3,000 for the year. The costs of those quick meals can sneak up on you in the long run. Whereas if you cut that weekly cost in half, you could save up to $1,500. For some people that might not be a huge number, but for others it could be put towards paying off debt, such as student loans.
Need help with budgeting your spending and expenses? Contact Us.
Note: Compared to July 2016 to June 2017, the Consumer Price Index (CPI-U) rose 2.3 percent, and average pretax incomes increased 4.3 percent.