In order to figure out how best people can save money we first have to know what people spend money on. So it will help to answer the question: What does a 'typical' family spend their money on?
The Bureau of Labor Statistics performs a consumer survey and complies data on what consumers spend money on. This information is summarized in the latest report: Consumer Expenditures in 2005 If you look on page 7 of the document Table 1 shows expenditures broken into income quintiles. I'll look at the third 20 percent quintile as a 'typical' middle income family. The 3rd quintile makes $42,622 before taxes and has 2.5 family members.
Here is how the expenditures look for the 3rd quintile:
(The 'Other' category shown in the graphic is a combination of smaller expense categories)
Top expense categories are:
Shelter : 19.5%
Food : 13.5%
Utilities: 7.9%
Vehicle purchase: 7.7%
Healthcare : 6.6%
Vehicle expense: 5.5%
Gasoline: 5.1%
Entertainment 4.6%
Apparel & services: 3.9%
Household furnishings: 3.6%
Total expenses for the major categories:
Housing: $13,234
Transportation : $7,437
Food: $5,295
Pensions : $3,555
Healthcare: $2,567
Entertainment: $1,813
Obviously everyones individual spending will vary, but these are typical average values.
I should note that these are not the average figures or exactly the median figures. They are the figures for the average of the 20% of Americans in the middle. The figures here are close to the median but not exactly the same. Average values would be a bit higher because they are skewed upwards by very high income earners. I think that looking at the average for the people in the middle is a very good way to represent the spending for 'typical' Americans.
Also see:
- Another dataset on spending from The N.Y. Times.
- The BLS Consumer Expenditure Survey site.
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