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Americans don’t change much over time, at least as it relates to spending.

The average young worker at 27 will remain consistent in how she allocates her spending over the next half century. Even as incomes rise, families expand and old age creeps up, Americans—with a few exceptions—are set in their ways.

This means there are big opportunities for conscientious spenders to change their habits and increase their savings. One cardinal rule: You must learn to set your sights lower.
If you’re one of the 61 percent of Americans who wouldn’t pay for an unexpected $1,000 expense out of savings, or are among those confronting record-level credit card debt, you need to change something.

Earning more would be great, but wage growth has hardly risen meaningfully faster than overall inflation since the end of the Great Recession. Given this fact, let’s concentrate on your spending habits.

But where to cut? Your mind may drift to unnecessary items, such as electronics or fancy clothes, as the best place to start. But those types of discretionary purchases amount to very little for any age cohort, from millennials to the silent generation.

The real money is in housing costs, according to the Bureau of Labor Statistics’ Consumer Expenditure Survey, which broke down American spending by category and generation.

Housing: the big one

The roof over your head eats up about a third of your budget, from principal and interest to maintenance and cleaning costs, no matter what your age.

  • Millennials, whose median earnings are a little less than $57,000 in after-tax income, shell out nearly $17,000 on housing per year, on average, or 35 percent of their total annual spending ($48,576.) Despite being the largest generation of homebuyers, only one-in-three Americans born in 1981 or later own their home.
  • The oft-forgotten Generation X spends the most annually on their homes among any generation (almost $23,000), but that amounts to only 33 percent of total annual spending. With an average age of 43—16 years older than the average millennial—more than three-in-five Gen-Xers own rather than rent.
  • Baby boomers allocate the lowest ratio of their spending to housing on an annual basis—31 percent—spending almost $19,000 per year, on average. Three-quarters of baby boomers own their home, with almost half of those homeowners mortgage free.
  • Nearly 80 percent of those born between 1927 and the end of World War II (the so-called silent generation) own their home, while three-in-five have completely paid off their mortgage. Nevertheless, housing costs make up the same share of their spending (35 percent) as they do for millennials.

You can try to refinance, or lower your maintenance costs, to chip away at the big price tag. But you need to make some real sacrifices, whether location or size, to lower your overhead.

Essentials: transportation, food and health

Transportation: Getting from point A to point B is the second largest cost for everyone save the silent generation, ranging from 14 to 17 percent of average annual spending.

Millennials use up the greatest share of total income (17 percent), spending almost $8,500 a year. Generation X (15 percent) spends a little more than $10,500 a year, boomers (16 percent) consume nearly $9,800, while their parents in the silent generation (14 percent) devote $6,000.

Food: Every generation allocates about one-eighth of their spending to food. The older you get, though, the more likely you are to make food at home.

Millennials ($6,300 in food spending) and Generation X ($8,900) both spend slightly less than half of their food budget on dining outside the home. Boomers ($7,300) and the silent generation ($5,500) spend only two-out-of-every-five dollars on eating out.

Health: Unsurprisingly, health costs rise when you age, making up just 5 percent of spending for millennials, compared to 15 percent for their grandparents. Health costs comprise 9 percent of the average boomer’s budget, and 7 percent for Generation X.

This presents a huge problem for millennial savers, though. Couples retiring at 65 today will spend nearly $300,000 on out-of-pocket health care over the course of their lives, and that doesn’t include outrageously expensive long-term care. Mitigating that huge deferred burden is vitally important, but products created to help (like health savings accounts) have been under-utilized by the young and healthy.

The fun stuff

Clothes and entertainment comprise a remarkably small share of your spending. Millennials and Gen-Xers only spend about one-twelfth of their annual budget on clothes and entertainment combined. It’s 8 percent and 7 percent for boomers and their parents, respectively.

You may loathe how much your spouse spends on television, games, hobbies or even the family dog, but in the grand scheme of things, it’s a relatively paltry sum.

Retirement

Only about half of Americans have a retirement plan, while the average person has just $4,500 in a checking or savings account. Half of all retirees will endure a lower standard of living in retirement, according to Boston College. People are leaning ever-harder on Social Security for their retirement income.

And yet, working-age Americans do save. Millennials, Gen-Xers and boomers all earmark roughly 12 percent of their spending to Social Security payments and retirement savings. Of course, the Social Security taxes you pay simply come out of your paycheck, depriving you of much say in the matter.

But you should use that principle when it comes to saving in your 401(k) or IRA, as well as building up your emergency fund.

Contribute at least 10 percent of your pay, including any match, into a tax-preferred retirement account, and sign-up for auto-escalation so you contribute slightly more each year. Spending to ensure your retirement security will bring you greater financial independence than the biggest house on the block.