What Americans Spend: An Overview of the Cost of Housing, Food, Transportation, and More.

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Many Americans spend a pretty penny every month to keep a roof over their heads, food on the table, and transportation. Other items commonly found in household budgets include education, childcare, health care, retirement savings, and entertainment.

You can take stock of your own budget comparison by looking at the average US household budget. The Consumer Spending Survey released by the US Bureau of Labor Statistics (BLS) lists the average amount spent on everything from housing and transportation to entertainment, clothing and charitable contributions. The most recent data available is from 2020.

Key household budget statistics

The average household earned $84,352 a year and spent $70,258 a year, according to the BLS survey. Based on the data, about $5,854 per month was spent on bills and other expenses. The largest expenses were housing and transportation, which accounted for 29% and 13% of the average budget, respectively. Another large category of expenses was food, to which 10% was spent.

Average US Household Spending

In addition to major categories such as housing, transportation and food, consumers spent money from their budget on things like health care (7%), entertainment (5%), education (2%), social security contributions, personal insurance and pension plans. (10 percent).

Other current expenses included child support, student care away from home, clothing, and contributions to religious or charitable organizations. An average of 13 percent of the money earned was allocated to personal taxes.

Costs Average annual cost % from the budget
Lodging $21,409 30%
Transport $9,826 14%
Income taxes $9,402 13%
Food $7,316 ten%
Personal insurance and social security and pension scheme contributions $7,246 ten%
Health care $5,177 seven%
Entertainment $3,341 5%
Cash contributions $2,283 3%
Clothing and services $1,434 2%
Education $1,271 2%
Various $907 1%
Personal care products and services $646 1%
TOTAL $70,258 100%*

*Percentages do not add up to 100% due to rounding.

Average housing cost

Housing spending rose 3.5% overall in 2020 from a year earlier, according to the BLS survey, with the average household spending $21,409 a year on housing, including rent or mortgage payments, utilities, furnishings, laundry and cleaning supplies.

Housing expenses for homeowners included an average of $7,473 per year for things like taxes, interest and maintenance:

  • Mortgage interest: $2,962
  • Property taxes: $2,353
  • Maintenance, repairs and insurance: $2,158

Average cost of utilities

Utilities accounted for about 19% of housing-related expenses, and Americans have paid more each consecutive year, rising to an average of $4,158 in 2020 from $3,737 in 2013. Included are heating and cooling costs, as well as internet and mobile phone services. The utility costs for 2020 were:

  • Natural gas: $414
  • Electricity: $1,516
  • Oil and other fuels: $105
  • Telephone services (including cellular service): $1,441
  • Water and other utilities: $682

What Americans pay to heat and cool their homes depends on where they live, as energy costs in the United States vary widely by region.

Average transport cost

Stay-at-home orders and remote working in 2020 impacted transportation costs for the year, with an average of $9,826 spent per household, representing a decrease of nearly 9% from the prior year . Conversely, the average household expenditure on the purchase of vehicles increased very slightly – almost 3% – in 2020 compared to 2019. The transport expenditure of the average household in 2020 was:

  • Vehicle purchases: $4,523
  • Gasoline, other fuels and engine oil: $1,568
  • Other vehicle expenses: $3,471
  • Public transit and others: $263

Average cost of taxes

American households earned an average of $84,352 in 2020 and paid an average of $9,402 in personal income taxes, after taking into account an average of $1,911 in government stimulus payments. The tax burden was the lowest amount paid since 2015, thanks to stimulus payments.

Total income taxes were made up of $8,812 in federal taxes, $2,430 in state taxes, and $72 in other taxes.

Average cost of food

Food continued to be a significant part of most consumers’ budgets. On an average day, about 14% of Americans shop for groceries, according to a recent study by the US Department of Agriculture’s Economic Research Service.

Nearly 12% of the US budget went to food, according to the 2020 BLS spending survey. Two-thirds of the money spent, or $4,942, was on food consumed at home, while that $2,375 was spent on eating out. The figures reflect a 33% drop from 2019 in the average amount spent on food eaten outside the home, as eating at home in 2020 has become more common due to the pandemic.

The percentage of home food budget of $4,942 in 2020 can be broken down into these categories:

  • Cereals and baked goods: 13%
  • Dairy products: 10%
  • Fruits and vegetables: 20%
  • Meat, poultry, fish and eggs: 22%
  • Other: 36%

Average cost of social security contributions

Chances are retirement savings are part of your budget, whether you’re in your 20s, 60s, or somewhere in between. Money can be withdrawn automatically from your paycheck if you’re enrolled in a 401(k) plan, or you can choose to fund a Roth IRA with money after it’s been taxed.

Americans can also contribute to an employer pension as well as Social Security, and funds for both are usually deducted automatically from each paycheck. An average of $6,760 was paid in 2020 by US households for these purposes, representing an increase of almost 2% over the previous year.

Average household savings and debt repayment

In 2020, American households earned an average of $74,949 after taxes and spent $61,334 on the household budget, leaving $13,615 that could be used for things like increasing savings and paying off credit cards, student loans or other debts.

Boosting emergency savings was cited by 14% of adults in a recent Bankrate personal finance survey as a goal for 2022. The personal savings rate can be defined as the percentage of disposable income left over after taxes and monthly expenses. The Bureau of Economic Analysis reported these personal savings rates for the final months in 2021:

  • November 2021: 6.9%
  • October 2021: 7.1%
  • September 2021: 8.1%
  • August 2021: 9.8%

Average cost of health care

Healthcare spending has eaten away at Americans’ budgets more each year, costing the average household $5,177 in 2020 for insurance and out-of-pocket medical expenses, including:

  • Health insurance: $3,667
  • Medical services: $864
  • Drugs: $476
  • Medical supplies: $170

Premiums are the amount paid each month for a health insurance plan and vary depending on the type of plan, the state you live in, and federal and state laws.

You can help lower health care costs by shopping around for a plan with the best rates. However, the lowest rates often come with plans that have higher deductibles, so people enrolled in such plans must put money aside to help cover medical emergencies.

Average cost of education

Households spent an average of $1,271 on education per year in 2020, according to the latest BLS survey. Tuition for public elementary and secondary schools is funded by taxpayer dollars, while parents seeking a private education for a child paid an average of $8,700 a year for elementary school and 14 $500 for high school.

Families who help their children pay for their education can face hefty bills, although tuition at a public school can help reduce costs. The average tuition for a student living on campus was $25,834 at a four-year public university, compared to $53,949 at a private institution.

Average cost of entertainment

According to the survey, nearly 5% of an average household’s spending was on entertainment, down nearly 6% from a year earlier. Spending on fees and admissions fell in 2020 due to the pandemic, while consumers spent more on toys, hobbies and playground equipment. Here’s how much was spent on each category of entertainment:

  • Fees and admissions: $425
  • Audiovisual equipment and services: $1,049
  • Pets: $690
  • Toys, hobbies and play equipment: $170
  • Other entertainment supplies, equipment and services: $579

Those who want to better manage their entertainment spending should consider following the 50/30/20 rule, where 50% of after-tax income is spent on needs, 30% on wants, and 20% on savings. The middle 30% can be spent on entertainment or recreational activities such as dining out, movies, streaming services, and vacations.

How to make a family budget

Creating a family budget can seem like a daunting task, but it can help reduce unnecessary costs throughout the year and keep you on track to save money, whether you want to add to your savings account, lock in a rate with a CD, or aim for a higher return with a money market account. Budgeting can be as simple as following a few simple steps:

  1. Determine a budgeting method. The 50/30/20 rule of budgeting involves dividing your income into three parts: needs, wants, and savings. A zero-based budget allocates every dollar of your income to categories, including savings.
  2. Start a spreadsheet. Whether created on your computer or written on paper, a spreadsheet is a useful tool for entering line items for money earned and spent.
  3. Add up your sources of income. Your only source of income may be your regular paycheck, or you may have additional income from sources like a side hustle or rental property. Add up all the money you bring in after taxes.
  4. Track your expenses. Create line items for each category of your expenses, including housing, transportation, food, healthcare, entertainment, savings, and debt repayment. Include fixed expenses that stay the same each month and those that fluctuate.
  5. Adjust as needed. If your income or needs change, be sure to adjust your budget accordingly. Updating your spreadsheet regularly will help you stay on track and reach your financial goals.
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