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

Prices of goods and services are currently at a 40-year high, leaving consumers with less money in their budgets for things like savings and debt repayment. Americans devoted 9.1 percent more of their incomes to expenditures in 2021 than in 2020, according to the most recent Consumer Expenditure Survey. The report, published by the U.S. Bureau of Labor Statistics (BLS), lists the average amount spent in various categories.

You can take stock of how your own budget compares by looking at the average American household budget.

Key household budget statistics

The average household earned $87,432 in 2021 before taxes and spent $66,928, according to the BLS survey. Significant expenditures were housing, transportation and food. Slightly more than three-quarters of people’s income in 2021 was devoted to living expenses.

Average 2021 household earning and expenditure statistics
Household earnings $87,431
Total household expenditures $66,928
Housing expenditures $22,624
Transportation expenditures $10,961
Food expenditures $8,289
Increase in household expenditures from 2020 9.1%
Percent of people’s income devoted to living expenses 76.5%
Area of largest expenditure increase Entertainment (22.7%)

Average American household expenses

According to the BLS survey, the largest expenditures were housing and transportation, which comprised 26 percent and 13 percent of people’s take-home pay, respectively. Another big spending category was food, to which 10 percent was devoted.

Eight out of 10 Americans surveyed by in 2021 reported they budgeted their money, which reflected a 12 percentage-point increase from 2019. The vast majority of budgeters in the survey said the practice got them out of debt or kept them from going into debt.

Cost of living expenses

Income taxes

The average pre-tax income per household in 2021 was $87,432, according to the BLS survey. From 2018 through 2021, married households filing jointly with that income were in a lower tax bracket than single filers, head-of-household filers and married couples filing separately with that income. However, in 2022, those of all four filing statuses will be in the same bracket for that income.

Retirement contributions

The average amount people had saved for retirement in 2021 was $98,800, which was up from $87,500 the previous year, according to Northwestern Mutual’s Planning & Progress Study. Based on this, Americans saved $11,300 on average for retirement from 2020 to 2021.

Data from the Federal Reserve Survey of Consumer Finances breaks down average retirement savings by age:

Age Average amount saved for retirement
Age 35 and younger $30,170
36-44 $131,950
45-54 $254,720
55-64 $408.420
65-74 $426,070
Age 75 and older $357,920

Household expenditures

Average cost of utilities

On average, people spend around $315 a month on electricity, natural gas, water, trash and sewer services. This comes out to $3,780 in a year.

The cost for some utilities can fluctuate depending on the season. For instance, people’s natural gas costs are often higher during the months they turn on the heat, whereas their electricity bill is higher when they use the air conditioner. Utility bills often vary by state and by climate.

Ways to save on utility bills include fixing leaky faucets and making sure unused lights are turned off. During the colder months, you can save by turning the heat down when no one is home or by lowering the heat a couple of degrees and wearing extra layers.

Average cost of food

A significant portion of most household budgets is devoted to food. Food was the third largest spending category for Americans in 2021, according to the BLS survey — and it’s been getting more expensive due to inflation. Over the past year, the price of food eaten at home has risen sharply, by 13.5 percent.

The foods that increased the most in price over a 12-month period ending in August 2022, according to the BLS, are as follows:

  1. Eggs: 39.8 percent
  2. Flour: 23.3 percent
  3. Milk: 17 percent
  4. Bread: 16.2 percent
  5. Non-alcoholic beverages: 13.4 percent
  6. Fruits and vegetables: 9.4 percent
  7. Meat, poultry and fish: 8.8 percent

Ways to combat rising prices and save money on groceries include making a weekly meal plan and corresponding grocery list, swapping expensive cuts of meat for cheaper options, buying generic products, and never going to the store on an empty stomach.

Average cost of housing

Housing expenses increased 5.6 percent overall in 2021 over the previous year, according to the BLS survey, with the average household spending $22,624 that year on housing. One of the housing costs for homeowners is property taxes.

The average property tax on single-family homes nationwide rose by 1.8 percent in 2021 over 2020, according to real estate resource Agent Advice. It identified the five U.S. cities with the largest property tax rate increases from 2020 to 2021 as:

  1. Lancaster, Pennsylvania (29.2 percent increase)
  2. Nashville, Tennessee (27 percent increase)
  3. Knoxville, Tennessee (22.2 percent increase)
  4. Chattanooga, Tennessee (22 percent increase)
  5. Winston-Salem, North Carolina (20.5 percent increase)

Another housing cost that has been on the rise is rent. The average monthly rent bill rose to $2,084 in September. The most affordable metropolitan areas to rent, according to Bankrate data, are:

  • Wichita, Kansas
  • McAllen, Texas
  • Little Rock, Arkansas

The most expensive places to rent are:

  • San Jose, California
  • New York City
  • San Francisco

One way to help brace yourself for possible future rent increases is asking your landlord whether you should expect an increase when your lease is up for renewal. If the answer is yes, knowing this in advance may give you sufficient time to find a new place if you can’t or don’t want to pay the more expensive rent bill.

Additional expenses that affect budgeting

Schooling costs


Inflation significantly affected back-to-school shopping in 2022, as 53 percent of those earning between $50,000 and $99,999 a year said they planned to change their back-to-school spending due to inflation, according to a Bankrate survey. That’s compared with 39 percent of households earning $100,000 or more and 37 percent of those with incomes of less than $50,000.

Bankrate’s survey found that parents seeking back-to-school savings planned to employ the following strategies:

  • Seek more coupons, discounts and sales (54 percent of respondents)
  • Buy fewer school items (45 percent)
  • Shop cheaper brands (43 percent)
  • Use items they already own for another year (39 percent)
  • Obtain used and secondhand items (30 percent)

Families with kids in grade school through high school reported they planned to spend an average of $864 on school items in 2022, according to the National Retail Federation. This amounts to around $15 more per family than was spent in 2021.

College costs

According to College Board data, the average price of college tuition is as follows for the 2022-23 school year:

  • Public, in-state, four-year university: $10,950 (an increase of 1.8 percent over 2021-22)
  • Public, out-of-state, four-year university: $28,240 (an increase of 2.2 percent over 2021-22)
  • Public, in-district, two-year college: $3,860 (an increase of 1.6 percent over 2021-22)
  • Private, four-year, nonprofit university: $39,400, (an increase of 3.5% over 2021-22).

In addition to tuition costs, the cost of living either on campus or in an off-campus apartment runs between $10,941 and $12,857, according to The cost varies based on whether the student attends a public or a private school, whether it’s a 2-year or a 4-year school, and whether it’s a for-profit or a nonprofit institution.

The average balance in a 529 college savings account was $25,664, as of June 2020, according to Saving for College, which broke down the average amount saved by families based on the child’s age:

  • Age 0-6: $7,929
  • Age 7-12: $15,359
  • Age 13-17: $27,559
  • Age 18 and older: $27,778

Transportation costs

Many Americans own a car, and the costs associated with buying and maintaining a vehicle take up a significant chunk of the average household budget. In June 2022, the average price of a new car was $48,301, while the average price of a used car was $28,200, Bankrate reported.

In addition to the significant cost of buying a car, ongoing expenses of owning a vehicle include insurance, maintenance and gasoline. The current national average price for gas is $3.44 a gallon, according to AAA Gas Prices, which lists the highest-ever recorded average price as $5.02 in June 2022.

More than a third — 38.2 percent — of consumers were financing new vehicles in the second quarter of 2022, and the average monthly payment for new vehicles was $667. For those financing used cars, the average monthly payment was $515.

How to budget

Creating a household budget may seem like a daunting task, but it can help alleviate unnecessary costs throughout the year and keep you on track with saving money, whether you want to add to your savings account, lock in a rate with a CD or aim for a higher yield with a money market account. Starting a budget can be as easy as taking some simple steps:

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