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Average Household Budgets
July 28, 2020

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Average Household Budgets

Have you ever wondered how much an average American spends on things like food, traveling, shopping, and so on? Do you feel like you are spending too much, or are you saving the money worth spending?

Here we will be answering some of the most important and concerning questions regarding online and physical spending habits. Most people spend the largest amount of their money on essentials, but some individuals tend to spend a lot on their hobbies and interests. This isn’t necessarily an issue – it’s just a statistic. The percentage of these people who spend a hefty amount of money on their passion is actually quite small.

Average Household Budgets

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What is Most of the Money Spent On?

American citizens spend most of their budget and money on housing. Be that through leasing, renting, renovating, or buying- housing is one of the biggest markets in America.

Transportation comes second when it comes to what people are spending their money on. It is understandably not a luxury but a necessity. America’s future and current growth is because of people being able to commute to work. Most of the people also have a passion for wanderlust, camping, trips, and expeditions on which they spend a fortune.

Average Monthly Expenses for One Person

How much does the average American spend monthly? It depends on so many factors like the city you live in, the district, taxes, and so on; but, just to give you a figure, the average American household spends $5,102 monthly. This average American budget data is gathered from the U.S. Bureau of Labor Statistics (BLS) Consumer Expenditure Survey.

Let’s dive into some important details and see what the money is actually being spent on. The average spending per month varies from person to person. Here is a list of average monthly expenses for a single person:

  • Topping the list is housing. The average monthly housing cost is around $,1,674 and up to 32% of a household’s income.
  • The second most amount of money is spent on transportation- $813 to be precise. 15% percent of the total money is spent on transportation.
  • Insurances and pensions cost $608, and they account for 11.9% of the average monthly budget.
  • The health care monthly budget is $414 and approximately 8.1% of income.
  • The monthly budget for groceries sits at 7.3% and is approximately $372. Money spent on food in restaurants monthly is $288 – about 5.6%.
  • Entertainment takes up 5.3% of the average budget, and it is about $414 per month.
  • Education costs $117, and it sits at 2.3%
  • Personal care products take up about $64, and the percentage of spending is 1.3%.
  • Apparel is $156 and its corresponding percentage is 3.1%.
  • Miscellaneous spending costs $169, with the percentage of spending being around 3.3%.

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Average Annual Expenses for One Person

Now, let’s take a look at the average spending for an American annually in 2018:

  • It’s no surprise that the most spent on item in the list again is housing. Housing for this group has an annual cost of around $20,091, and it can account for up to 32% of the annual budget. The second most amount of money, $9,761 (15.9%), is spent on transportation.
  • Insurances and pensions cost $7,296 per year, and they take up 11.9% of spending of the annual budget.
  • The health care annual budget is $4,968, and the percentage of spending is 8.1%.
  • The grocery annual budget is $4,464, and the expenditure percentage per year is 7.3%.
  • Money spent on food in restaurants annually is $3,459, and the percentage of spending is 5.6%.
  • Entertainment takes up 5.3% of annual spending – about $3,226.
  • Annual education costs $1,407 (about 2.3% of a yearly budget).
  • Personal care products take up about $768, which would be 1.3% of income.
  • Apparel costs around $1866 per year. Its expenditure percentage is approximately 3.1%.

Other miscellaneous spending can cost up to $2030 (3.3%).

Average Family Budget

We have discussed the average annual and monthly spending on an individual level. Now, let’s move on to family budgets. For a benchmark, we compare America’s 3 most populated cities.

Average Monthly Expenses for a Couple

New York is at the top when it comes to population. Here are the statistics on average monthly expenses for a couple living a modest life in New York. Let us take a look at the average monthly bills for a couple. The average housing cost is $1,558 and tops the list of expenditures. Food will cost $576 monthly. Transportation is relatively cheap here compared with the other cities, so it will only cost $477. Health care is an important necessity too, which costs $850. Taxes will be about $865 monthly. Other necessities cost $861- this category includes items such as furniture and hobby supplies.

So, the monthly total would be $5,188 for a couple in New York. Annually, it will be $62,256.

Los Angeles is the second-most populous city. So, here are the statistics on monthly expenses for a couple living in Los Angeles to live a modest life. With average housing costing $1,284, it tops the list of expenditures. Food will cost $527 monthly. Transportation is relatively costly here compared with the other cities, and costs $960 per month. Health care will be $524. Taxes will be about $671 monthly. Other necessities cost $731.

So, the monthly cost would be $4,697 for a couple in Los Angeles. Annually it will be $56,364.

Let’s talk about Chicago next, as it is the third-most populous city. Here are the statistics on monthly expenses for a couple living a modest life in Chicago. With average housing costing $1,014, it is at the top in terms of expenditures like always. Food will cost $469 monthly. Transportation is a bit costly here and will cost $900. Health care will be $689. Taxes will be about $677 monthly. Other necessities (household supplies, personal care products, etc.) will cost around $598.

A couple living a modest life in Chicago will spend about $4,347 per month or $52,152 per year.

If your city is not discussed here, don’t worry; the cost variations are not too drastic. You can check data for your own city at the Economic Policy Institute website.

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Average Monthly Expenses for a Family of 3

Here we are talking about a couple with one child. Let us take New York as an example first. Specifically, we will calculate costs for a family of 3 that are living a modest life. The average housing cost will be around $1,789 per month. Food will be $718 per month, while childcare should be approximately $1,135. Compared to other cities, transportation is relatively cheap, at only $550 per month. Health care is an important necessity too, which costs $1,200. Taxes will be about $1259 monthly. Other necessities cost $1,011. So, the monthly total would be $7,661 for a family of 3, and it will be $91,932 annually.

In Los Angeles, a modest life for a family of 3 will have a monthly housing cost of $1,663.  Food will cost $656 monthly. Transportation will cost $1,046. Health care will be $660. Taxes will be about $958 monthly. Other necessities cost $935. Childcare will cost $656.

The monthly cost would be $6,716 for a family of 3, which is an annual cost of $80,592.

Under the same living conditions, a family of 3 in Chicago would have a monthly housing cost of $1,180. Food will cost $584 monthly, and childcare will cost $915. Transportation will cost $986, and health care will be $871. Taxes will be about $927 monthly. Other necessities, such as clothing and cell phone plans, will cost $712.

A family of 3 living in Chicago can expect to spend $6,175 per month. Annually, it will be $74,100.

Average Monthly Expenses for a Family of 4

These statistics account for a family of 4 (2 parents and 2 children) living a comfortable life in their city.

In New York, the monthly housing cost for these circumstances would be $1,789. Food will cost $908 monthly, transportation will cost $589, and health care will be around $1,238. Taxes will be approximately $1,958 monthly. Other necessities cost $1,088, and childcare will cost you $2,773.

So, the monthly total would be $10,344 for a family of 4 living in New York. Annually it will be $124,128.

For the same family of 4, monthly housing would cost $1,663 in Los Angeles. Food will cost $830 monthly. Transportation will cost $1,159. Health care will be $795. Childcare will $1,223. Taxes will be about $1,016 monthly, and other necessities cost $1,006.

So, this family of four would spend $7,691 per month in Los Angeles, or $92,292 per year.

If you are residing in Chicago, then monthly housing expenses would amount to about $1,180. Food will cost $739 monthly. Transportation is $1,054. Health care will be $1,053. Taxes will be about $1,042 monthly. Other necessities will cost $774, and childcare for two children will cost you $1,537.

The monthly cost is $7,378 for a family of four living in Chicago. Annually it will be $88,536.

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Average Monthly Expenses for a Family of 5

When referring to a family of 5 here, that means that there are 2 adults with 3 children residing in the same house. So, the monthly budget for them to live a modest life in New York is as follows: monthly housing costs are about $2,280. Food will cost $1,109 monthly. Transportation will cost $610. Health care costs $1,277. Taxes will be about $2,569 monthly. Other necessities cost $1,367. Childcare will be $3,277 for 3 children.

So, the monthly total would be $12,489 for a family of 5 living in New York. Annually it will be $149,868.

Modest living for a family of 5 in Los Angeles would look like this: Housing is $2,231 per month, food is $1,013 monthly, and childcare is $1,353. You might notice that childcare is far more affordable in Los Angeles than it is in NYC. Transportation will cost $1,208, health care will be $931, and taxes will be about $1,441 monthly. Other necessities would add up to $1,309.

So, the monthly cost would be $9,487 for a family of 5 living in Los Angeles. Annually, it will be $113,844.

And lastly, a modest lifestyle for a family of 5 in Chicago: they would spend $1,501 on housing per month and $902 on food. Transportation is a bit costly at $1,145 per month. Health care is $1,234, and childcare for three children is $1,729. Taxes should end up being approximately $1,231 per month. Miscellaneous expenses (furniture, clothes, and so on) will cost around $970 per month.

With that taken into account, the monthly cost for a family of 5 in Chicago is $8,712. In yearly terms, that will be $104,544.

As you can see, it can be quite expensive to live in the United States, especially if you live in a major city. While job salaries typically rise in areas with higher costs of living, it can still be difficult to keep up with the incredibly high costs of housing and healthcare. If you find yourself struggling financially, reach out to DebtQuest USA. Our team of experts would be happy to help you discuss your options.

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