How Do You Stack Up? An Eye-opening Look at the Average American Expenses

by Chris Tecmire

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If you could look into the average American’s checking account, what would it look like?  How much money do they spend on housing, clothing, or healthcare?  What’s their net worth?  More importantly, how do you compare?

Comparing ourselves to other people can be a dangerous game since we are all different and unique.  You are uncommon.  Your location is different.  Your situation is different.  Your obstacles are different.

However, we can learn from each other.  A sneak peek into the average American expenses can teach us a few things about our own situation.  It teaches us what areas we might be able to improve upon and reveals if there are any traps that may lie in wait.

Plus, it’s just kind of fun to know.  So, here we go.


The average American household produces an after-tax income of $60,712 and consists of 2.5 people.  Here’s what they spend their money on.

Before we start…if you’re only guessing how you stack up, start tracking your expenses with this simple spreadsheet.  It’s incredibly helpful to be able to look back and see exactly how much you spent in the last month on food, or gas, or entertainment.  It allows you to budget more effectively and adjust if necessary.  No more guessing.


Average American Expenses by Dollars



A couple of notes:

Eating out comprises 38% of the food and drink expense.

This information is from 2010.  The annual gasoline expense soared in 2011, so the transportation expense shown in the chart is actually much lower than it would be currently.

The housing figure includes repairs, insurance, and property taxes.



Average American Expenses by Percentage



So, do you think choosing a place to live is important, or what?  Yikes.  A chart like this hammers home the idea that there are 3 categories that you should focus on if you want to get the biggest bang for your buck.  Housing, transportation, and food make up a whopping 64% of the average American’s expenses!  About $2 out of every $3 that comes out of your pocket is headed in one of those 3 directions.  If you were to add utilities and home furnishings into the housing category, you could make an argument that we actually spend 75% of our expenses on these 3 items!  It’s yet another good reminder to make sure you know what you’re doing before buying a house.



What about net worth?  In the next two graphs, we’re going to take a look at the median net worth and focus on two factors.


Median Net Worth by Age


Average American's Net Worth by Age


This tells me that we can do better.  Back in my early 20’s, I used to be one of the culprits who was holding back the average.  So, I know how it goes, but those first few categories seem really low.  Apparently young fellers like me don’t usually think much about saving, investing, and staying out of debt – the 3 activities that will give your net worth the biggest kick in the pants.


Median Net Worth by Income


Average American's Net Worth by Income


I think income is probably a better indicator of net worth than age.  There are plenty of poor 65 year olds and plenty of rich ones alike.  However, no matter what your age, if you’re making a 6-figure income each year you should have something to show for it.  If that’s not the case, you may want to start analyzing your decisions more carefully from now on.  You may be spending too much on consumables that don’t add value to your balance sheet.


If you’d like a more specific comparison that takes into account both age and income, take a look at the CNN Money Net Worth Calculator to see how you stack up.

Don’t know what your net worth is?  Learn how to calculate it here.


So, what did you learn?

Does this make you feel better about your finances…or worse?  Remember that every situation is different, so don’t just rely on beating these figures.  You need to make sure that YOU are secure, saving money, and paying off debt.

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{ 1 comment… read it below or add one }

Todd August 16, 2012 at 1:13 pm

Really appreciate your research and making this info available for people to so easily learn from and improve their own finances!


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