June 26, 2023

How much does the typical American family spend a year?

The answer – $69,732 in 2020, per the “Consumer Expenditure Survey” from the U.S. Bureau of Labor Statistics – was surprising.

Many Americans are unaware of how much they spend and what they buy. Without knowing how much money your family spends regularly, it’s difficult to make thoughtful financial decisions.

Some people live paycheck to paycheck, never worrying as long as there’s some money in the bank. Consider how the 2020 average annual American household income was $84,352, with average spending on key items (housing, transportation, health care, taxes, and food) amounting to $69,732.

How does that compare to the rest of the world?

Worldwide consumer spending per household in 2020 was $52,991. That amount increased by 12.6% from 2020. Still, American consumers spend almost $1,500 more than the average worldwide consumer every month. That’s a testament to how the U.S. is the most affluent country in the world.

The four largest categories of household spending are housing, transportation, taxes, and food. Here’s what average American households pay for them every month:

  • Housing: $1,784
  • Transportation: $819
  • Taxes: $784
  • Food: $610

On the savings side, from 1959-2022, the average U.S. savings rate was roughly 9.0%, per the U.S. Bureau of Economic Analysis. In the second half of last year, it averaged 3.3%. [KT1] Economists blame much higher inflation.

Let’s mention some other scary savings statistics you’ve probably heard of before.

Like how 21% of Americans don’t save any of their income. Or that nearly half of Americans would use credit to cover an unexpected $400 financial hardship. Or the fact that 47% of men aged 55-66 have no retirement savings (it’s 50% for women).

Americans earn and spend, but don’t save!

 [KT1]Calculated from linked data (slightly different than what Dan said on the call)