American families are dealing with the increasing cost of living. Your monthly budget may feel tight. You may be wondering if other families feel the pinch too? Well, according to a CNBC and SurveyMonkey survey, 65% of Americans are living paycheck to paycheck. So, you’re definitely not alone.
The average American household spends about $6,545 per month (totaling $78,535 annually), according to the Consumer Expenditure Survey conducted by the U.S. Bureau of Labor Statistics. The categories that families spend the most on are housing, transportation, and food.
Although inflation and rising prices are making it challenging to keep up with daily living costs, every individual has a unique financial situation. Let’s walk through how Americans are spending their money.
What Americans Spend Their Money On
Americans spend their money on a variety of expenses. Here’s an overview of the 14 major categories and the monthly costs sorted by what households spend the most on.
- Housing (own or rent): $2,188
- Transportation (own vehicle, gas, insurance, public transportation): $1,109
- Food (groceries, dining out): $847
- Personal insurance and pensions (life, retirement, social security): $816
- Healthcare (insurance, medical services and supplies, drugs): $516
- Entertainment: $301
- Cash contributions: $191
- Apparel and services: $167
- Education: $131
- Miscellaneous: $102
- Personal care products and services: $82
- Alcoholic beverages: $54
- Tobacco products and smoking supplies: $29
- Reading: $10
Given that rent and mortgage payments can be costly, it makes sense that they take up a sizeable portion of the monthly budget. The second-highest cost is transportation, which could be the cost of owning and maintaining a vehicle or of relying on public transportation. The third-highest expense is food, which includes meals at home and outside the home. Those three categories make up the bulk of American households’ spending and are considered basic living expenses. Then there’s personal insurance and pensions, along with healthcare, which round out the top five expenditures. The remaining expenditures are mostly discretionary.
Spending Based on Type of Household
Each household is unique. When we take a closer look at different household types, we can see that average expenditures vary significantly. To give you an idea:
Single-person households spend an average of $4,715 per month ($56,587 annually).
Married couples without children spend an average of $7,390 per month ($88,687 annually).
Married couples with children spend an average of $9,465 per month ($113,585 annually).
When you’re living on your own, you have to cover all your expenses. Married couples without kids can share these expenses. So, there’s some cost savings when you live with a partner. Married couples with children to raise naturally incur the highest expenses because they must provide for them for at least 18 years. Raising a child now costs more than $300,000 in the United States. As a result, it makes sense that parents or caregivers with children have the highest monthly expenditures.
Spending Based on Income Quintile
If we take this a step further and examine the average annual expenditures by income quintile, we can see a large variance:
- Lowest quintile: $2,920 per month ($35,046 annually)
- Second quintile: $4,171 per month ($50,054 annually)
- Third quintile: $5,575 per month ($66,900 annually)
- Fourth quintile: $7,497 per month ($89,972 annually)
- Highest quintile: $12,528 per month ($150,342 annually)
Essentially, low-income families spend under $3,000 per month on expenses. In contrast, the highest-income families spend more than 4x that amount, at about $12,500 per month. Those with low earnings need to be creative and mindful of how they spend their money, stretching every dollar. Affluent families typically have more discretionary income to buy fancier things (say, new electronics or designer clothes) or to enroll their children in more expensive activities or private school. However, each family has its own money values and principles.
Keep in mind that these are national averages. Your numbers may be similar to or quite different from those of the average American household and income types.
Calculating Your Monthly Expenses
Your household size and the city and state you live in can affect how much your household spends each month.
When you create a budget, you can add in your expenses (based on the categories above) to see how much you spend each month. You’ll need to gather your credit card statements, bank statements, and receipts to determine how much you spend on each category.
You can use a spreadsheet or a budgeting tool to help you get started. Some budgeting apps can even help sort and categorize your transactions so you don’t have to do it manually.
Once you’ve completed this exercise, you can see at a glance how much you spend in each category on a monthly basis. To get your yearly total spending, multiply your monthly expenses by 12.
Spending Based On Your Lifestyle
When you compare your numbers with the national averages, there’s no right or wrong way to spend money in each category. Every household spends its money differently. Most importantly, it comes down to your values, lifestyle, and how much you’re willing to spend on various things.
If you live in a high-cost-of-living city, you may have to pay more for housing compared to those who live in rural towns. Someone who can take public transportation, bike, or walk will keep their transportation costs lower than a family living in the suburbs who has to drive every day to work or to take their kids to school.
You can use a Cost of Living calculator to compare how much it costs to live in your current city versus a new city. It can give you a good idea of whether it’s more affordable or more expensive.
FAQ
What’s the average American household spending per month?
It depends on the type of household. For a single-person household, the average monthly spend is $4,715. Married couples without children spend an average of $7,390 per month. Married couples with children spend $9,465 per month.
What are the top expenses for Americans?
Housing, food, and transportation make up the majority of American households’ monthly expenses and are basic necessities of daily life. Housing costs can be incurred through owning or renting. Food costs include meals at home and outside of the home. Transportation includes the cost of owning a vehicle or taking public transportation.
How do I determine my monthly expenses?
You’ll need to review your monthly bank and credit card statements to determine how much money you’re spending on different categories. You can figure out your expenses for one month, then multiply that by 12 to get your annual budget. However, there may be seasonal or one-off expenses such as weddings or holiday gifts that you should factor into your budget.
How do I cut back on my expenses?
When you look at your budget, you can see which expenses you spend the most on. From there, you can take a deeper look at areas where you’re overspending and consider cutting back. You may have ongoing subscriptions or memberships that no longer serve you. Alternatively, you can negotiate your bills with your providers to lower your costs.
The information provided on this website is for general informational and educational purposes only and should not be considered financial, investment, legal, or tax advice. While we strive to provide accurate and up-to-date information, we make no guarantees regarding the completeness, reliability, or accuracy of any content. Any financial decisions you make are your responsibility. You should consult with a qualified financial advisor, accountant, or other licensed professional before making decisions based on information found on this site.
Past performance is not indicative of future results. Any examples provided are for illustrative purposes only and may not reflect your individual circumstances. By using this website, you agree that we are not liable for any losses or damages arising from your reliance on the information provided.
Sources:
- https://www.quicken.com/blog/monthly-expenses/?srsltid=AfmBOoqui15yk55OuyyvvnIyL0Ev9WRWUWoJBPr74XlC03ApwJqp-vfm
- https://www.epi.org/resources/budget/budget-factsheets/
- https://www.chase.com/personal/banking/education/budgeting-saving/average-american-monthly-expenses-and-bills
- https://www.fool.com/money/research/average-monthly-expenses/
- https://www.bls.gov/cex/
- https://www.bls.gov/news.release/pdf/cesan.pdf
- https://www.ramseysolutions.com/budgeting/american-average-monthly-expenses
- https://www.cnbc.com/2024/04/09/most-of-americans-are-living-paycheck-to-paycheck-heres-why.html
- https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error/cu-composition-2024.xlsx
- https://www.nerdwallet.com/cost-of-living-calculator
- https://fortune.com/2026/04/12/cost-of-raising-child-in-us-2026/
