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What Americans spend: A look at the cost of housing, food, transportation and more

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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.

You can take stock of how your own budget compares by looking at the average American household budget. The Consumer Expenditure Survey published by the U.S. Bureau of Labor Statistics (BLS) lists the average amount spent on everything from housing and transportation to entertainment, clothing and charitable contributions. The most recent data available is from 2020.

Key household budget statistics

The average household earned $84,352 a year and spent $70,258 a year, according to the BLS survey. Based on the data, about $5,854 a month went toward bills and other expenses. The largest expenditures were housing and transportation, which comprised 29 percent and 13 percent of the average budget, respectively. Another big spending category was food, to which 10 percent was devoted.

Average American household expenses

In addition to major categories like housing, transportation and food, consumers dedicated money from their budgets to things like health care (7 percent), entertainment (5 percent), education (2 percent), and Social Security contributions, personal insurance and retirement plans (10 percent).

Other common expenses included child support payments, care of students away from home, apparel, and contributions to religious or charitable organizations. An average of 13 percent of money earned was assigned to personal taxes.

Expense Average annual cost % of budget
Housing $21,409 30%
Transportation $9,826 14%
Income taxes $9,402 13%
Food $7,316 10%
Personal insurance, and Social Security and retirement plan contributions $7,246 10%
Health care $5,177 7%
Entertainment $3,341 5%
Cash contributions $2,283 3%
Apparel and services $1,434 2%
Education $1,271 2%
Miscellaneous $907 1%
Personal care products and services $646 1%
TOTAL $70,258 100%*

*Due to rounding, percentages do not add up to 100%.

Average cost of housing

Housing expenses increased 3.5 percent overall in 2020 over the previous year, according to the BLS survey, with the average household spending $21,409 a year for housing, including rent or mortgage payments, utilities, furnishings, and laundry and cleaning supplies.

Housing-related expenditures for homeowners included an average of $7,473 a year for things like taxes, interest and maintenance:

  • Mortgage interest: $2,962
  • Property taxes: $2,353
  • Maintenance, repairs and insurance: $2,158

Average cost of utilities

Utilities accounted for about 19 percent of housing-related expenses, and Americans have paid more each consecutive year, rising to an average $4,158 in 2020 from $3,737 in 2013. Included are costs of heating and cooling, as well as internet and cellphone service. Utility costs for 2020 were::

  • Natural gas: $414
  • Electricity: $1,516
  • Fuel oil and other fuels: $105
  • Telephone services (including cellphone service): $1,441
  • Water and other public services: $682

What Americans pay to heat and cool their homes depends on where they live, as energy costs in the U.S. vary significantly based on region.

Average cost of transportation

Stay-at-home orders and remote work in 2020 affected transportation costs for the year, with an average $9,826 spent per household, reflecting a nearly 9 percent decrease over the previous year. Conversely, the average household expenditure for vehicle purchases was up very slightly — nearly 3 percent — in 2020 over 2019. Transportation expenses for the average household in 2020 were:

  • Vehicle purchases: $4,523
  • Gasoline, other fuels and motor oil: $1,568
  • Other vehicle expenses: $3,471
  • Public and other transportation: $263

Average cost of taxes

American households earned an average of $84,352 in 2020 and paid an average of $9,402 in personal income taxes, after an average of $1,911 in government stimulus payments is factored in. The tax burden was the lowest amount paid since 2015, thanks to the stimulus payments.

The total in income taxes was made up of $8,812 in federal taxes, $2,430 in state taxes and $72 in other taxes.

Average cost of food

Food continued to be a big part of most consumers’ budgets. On an average day, about 14 percent of Americans shopped for groceries, according to a recent study by the U.S. Department of Agriculture’s Economic Research Service.

Nearly 12 percent of the American budget went to food, based on the BLS 2020 expenditures survey. Two-thirds of money spent, or $4,942, was on food eaten at home, while $2,375 was spent on meals eaten away from home. The figures reflect a 33 percent drop from 2019 in the average amount of money spent on food eaten outside the home, as eating at home in 2020 became more common due to the pandemic.

The percentage of the $4,942 at-home food budget in 2020 can be broken down into these categories:

  • Cereals and bakery products: 13 percent
  • Dairy products: 10 percent
  • Fruits and vegetables: 20 percent
  • Meats, poultry, fish and eggs: 22 percent
  • Other: 36 percent

Average cost of Social Security contributions

There’s a good chance retirement savings is a line item in your budget, whether you’re in your 20s, 60s or somewhere in between. The money may be taken out of your paycheck automatically if you’re enrolled in a 401(k) plan, or you may choose to fund a Roth IRA with money after it’s been taxed.

Americans may also contribute to an employer pension as well as Social Security, and the funds for both are usually taken automatically from each paycheck. An average of $6,760 was contributed in 2020 by American households for these purposes, reflecting a nearly 2 percent increase over the previous year.

Average household savings and debt repayment

In 2020, American households earned an average of $74,949 after taxes and devoted $61,334 to household budgets, leaving $13,615 that could be used for things like increasing savings, and paying off credit cards, student loans or other debts.

Beefing up emergency savings was cited by 14 percent of adults in a recent Bankrate personal finance survey as a goal for 2022. The personal savings rate can be defined as the percentage of disposable income left after taxes and monthly spending are accounted for. The Bureau of Economic Analysis reported these personal saving rates for recent months in 2021:

  • November 2021: 6.9 percent
  • October 2021: 7.1 percent
  • September 2021: 8.1 percent
  • August 2021: 9.8 percent

Average cost of health care

Health-care expenses have been eating into Americans’ budgets more each year, costing the average household $5,177 in 2020 for insurance and out-of-pocket medical expenses, including:

  • Health insurance: $3,667
  • Medical services: $864
  • Drugs: $476
  • Medical supplies: $170

Premiums are the amount paid each month for a health insurance plan and vary by type of plan, the state you live in, and state and federal laws.

You can help reduce health-care costs by shopping for a plan with the best rates. Often lower rates come with plans that have higher deductibles, however, so those enrolled in such plans should set aside money to help cover medical emergencies.

Average cost of education

Households spent an average of $1,271 on education a year in 2020, based on the latest BLS survey. The tuition for public elementary and high schools is funded through taxpayer dollars, while parents seeking private education for a child paid an average of $8,700 a year for grade school and $14,500 for high school.

Families helping their kids pay for college can be faced with hefty bills, although tuition at a state school can help reduce the costs. Average tuition for a student living on campus was $25,834 at a four-year, in-state university, compared with $53,949 at a private institution.

Average cost of entertainment

Nearly 5 percent of the average household’s spending was for entertainment purposes, which was down almost 6 percent from the previous year, according to the survey. Expenditures on fees and admissions dropped in 2020 due to the pandemic, while consumers spent more on toys, hobbies and playground equipment. Here’s how much was spent on each entertainment category:

  • Fees and admissions: $425
  • Audiovisual equipment and services: $1,049
  • Pets: $690
  • Toys, hobbies and playground equipment: $170
  • Other entertainment supplies, equipment, and services: $579

Those wishing to get a better handle on entertainment spending should consider following the 50/30/20 rule, for which 50 percent of after-tax earnings is devoted to needs, 30 percent to wants and 20 percent to savings. The middle 30 percent can be devoted to entertainment or recreational activities like dining out, movies, streaming services and vacations.

How to make a household 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.
Written by
Karen Bennett
Consumer banking reporter
Karen Bennett is a consumer banking reporter at Bankrate. She uses her finance writing background to help readers learn more about savings and checking accounts, CDs, and other financial matters.
Edited by
Wealth editor