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A look at the average American’s monthly expenses

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    The cost of living is going up — and so are Americans’ monthly expenses.

    This increase in cost of living and inflation may result in a spike in monthly spending for many American households. The added spending may even affect people's average net worth, as they're less able to save for down payments on homes, retirement and other financial goals.

    According to the Bureau of Labor Statistics (BLS), the average household spent $6,080 each month on housing and other monthly expenses in 2022. This represents a 9% increase from 2021, while average income increased 7.5% in the same time period.

    Read on to learn more about the typical monthly expenses for Americans and how you may reduce your monthly expenses.

    The average American’s monthly budget

    The Bureau of Labor Statistics (BLS) conducts an annual Consumer Expenditure Survey to better understand personal finance on a household level. The most recent survey was conducted from January to December 2022 and released in September 2023. The study reflects what the BLS refers to as “consumer units,” which are essentially households of either related family members or roommates.

    The survey breaks down income and expenditures on essentials, such as food and shelter, as well as discretionary spending on apparel, food away from home and other monthly bills, by consumer unit. The following data from the 2022 Bureau of Labor Statistics survey will allow you to assess how your spending compares with the average household.

    Average monthly income

    Generally, spending increased faster than income in 2022. The average consumer unit or household income was $94,003 in 2022, or $7,834 monthly, according to the study. The figure reflects income before taxes, meaning that the average monthly take-home pay is less after taxes.

    The spending power of a household’s earnings largely depends on where people live.

    Americans in less expensive places may be able to boost their average savings because they typically spend less monthly, while it may be more of a challenge to save in places that have a higher cost of living. That said, salaries also may be lower and job opportunities less broad in regions where it's less expensive to live.

    Monthly expenses list

    According to the same 2022 BLS study, the average American’s monthly expenses are $6,080, which is about 77% of the average monthly income before taxes. This list of expenses covers everything from housing, health insurance and food to entertainment, personal care products and books. Here’s how spending breaks down into a list of monthly expenses by budget categories.

    • Housing – $2,024 monthly cost in 2022
    • Transportation - $1,024
    • Personal insurance and pensions - $728
    • Healthcare - $487
    • Food at home - $475
    • Food away from home - $303
    • Entertainment - $288
    • Cash contributions - $229
    • Apparel and services - $162
    • Education - $111
    • Miscellaneous - $84

    Calculate your monthly expenses

    As inflation affects your personal budget, keeping track of your monthly expenses may help you identify overspending, reduce impulse buying and areas where you may be able to save. A budget calculator, budgeting apps or even a traditional budget worksheet (PDF) or template may make noticing your spending habits easier.

    These tools may help enable you to understand where you’re spending your money. To calculate your monthly expenses, categorize your spending into areas like the ones covered above (healthcare, education, personal care, etc.) and determine the total for the year. Then divide that total by 12.

    Track your expenses and grow your savings

    Understanding your budget for monthly expenses not only helps to limit overspending but also may help you reach your financial goals. Once you know where your money is going, this may help you determine how much of your income to save each month.

    Then you may take any money you've saved and put it in a savings account or build an emergency fund. You may even decide how much you may be able to increase monthly payments on credit cards if you’re trying to decrease your debt payments. The end result is a better understanding of your financial picture and potentially an increased ability to grow your savings, even as costs rise.


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