August 5, 2010

Comparing Spending in 1950 vs Today

In 1950 American households spent about 37% of their income on food and clothing.    That is certainly a lot of money to spend on food and clothing.    Today we spend just 13% of our money on food and clothes.   Thats 24% of our income that we're no longer putting into food and clothing.   Thats a huge difference.

I got the consumer expenditure survey data for 2008 from the BLS site.  Ok, so 2008 is not exactly "today" but its the latest date they have compiled.    The 1950 data is also from the BLS, I found it in this document on table 14.

Here is a graphical look at how much of our income we spend on average for different categories back in 1950 compared to 2008 : 

As you can see the amount we spend on food and apparel are both drastically down from 1950 to 2008.   Other categories we generally spend a bit more today than we did in the 50's.   Our spending on housing, transportation, health care and entertainment as a % of our income is all up now compared to then.

Its hard to see the columns for booze, smokes and reading / education.    We spend a lot less on the vices nowadays.   In 1950 we spent about 3.1% of our income on alcohol and tobacco and by comparison in 2008 we spent 1.2%.   Our spending on reading & education went up a bit but it was almost all in the education category, probably due to much higher college spending.


  1. Surprising that health care hasn't risen more?!

  2. Yes actually I am surprised percent of income spent on health care. But I did a little digging and it seems that health insurance only became common in the 50's. One source said only 10% of people had insurance in 1940 and a chart I found shows about 40% by 1950. So more people were apparently paying everything out of pocket back in the 50's. But costs for health care were lower then as health care was pretty basic compared to today.

  3. I'd be curious to see this including things that seem to be modern day "necessities" in technology: computers, ISPs, cell phones, etc

  4. With more dual incomes in 2008, I'm surprised childcare is not listed here. It's currently my biggest expense..about double my food or housing cost.

  5. Halt, computers, internet and telephone charges all are part of the housing category as household equipment and utilities. Televisions are part of entertainment.

    Sandy, oddly daycare and baby sitting are filed under the housing category in the personal services section.

    The details of what is in each category are at the BLS site:

    As of 2008 the average household spends $1127 a year on telephone services, $383 on personal services in the home and $1036 a year on audio/visual equipment.

    That figure for personal services seems low if it includes daycare but if you look at just married couples with children under age 6 then the average is $2719.

  6. I think people were accustomed to seeing the necessary investment of money in these objects, which used to be very interesting, but which may now be rendered inopportune by the fact that the technology is being advanced by users and large industries.


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