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Your Take: You vs. What Average American Buys
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Last week, NRP’s Planet Money took a look at What America Buys and put together a graphic illustrating how much the Average American spends in each category of their budget. It’s based on data from the Bureau of Labor Statistics December 2011 CPI report and includes the “major” categories (smallest is “Books, magazines and newspapers” with 0.2%, so it gets fairly granular).
I thought it was interesting that “Rent, mortgages” captured 31.5% of spending. Assuming the average American saves 0%, that would put that amount in line with the rule thumb that you should spend less than a third of your income on housing. That said, once you add in everything related to housing like utilities and furniture/household items, it balloons to 41%.
The fun part of the chart is the comparisons between 1949 and 2011. There are three big things that jump out at you. First, food spending went way down from 40% of spending to just 15.3%. Next, housing spiked from 26.1% to 41%. Finally, medical care went from 3.2% of spending to 7.1%.
We don’t spend nearly as much on housing (we’ve lived in our house for 6 years so household item and furniture purchases are at a minimum, plus our incomes have increased while our mortgage has stayed mostly flat) and I benefit from low transportation costs (working from home). Medical care is going to be lower since we are both young and in good health, but I suspect we spend more than the 15.3% on food.
How does your spending compare?
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I spend more then 1% on pets, but I think the other numbers are about right.
Jim, I think you have a typo or maybe wrong link or something. That link you have labeled “Bureau of Labor Statistics December 2001 CPI report” goes to a document titled “CPI Detailed Report Data for January 2012″
Two things happened, the BLS updated what the link pointed to and I had a typo (it was based on December 2011 data).
I found the comparison between 1949 and 2011 quite interesting and definitely food for thought.
The thing I wish people would mention when comparisons between 1950 and today come up is that in 1950, a percentage of one income was divided between these expenses, and now it is the percentage of two incomes (on average). So some of the drops in the percentage of spending could be due to there being more available cash in the household.
We spend only about 12% of our income on our mortgage, and with the other miscellaneous housing costs, it probably gets up around 15 or 16%, but we’ve been in the house for 15 years, as our income has risen from an original ratio of around 24% spent on housing. The downside of living here for that long is that now it’s time to begin replacing appliances and furniture, piece by piece, as they wear out.
My budget on books is way higher than the national average – I have a serious addiction.
My personal graphic would look a lot different than these. I spend little money on anything that’s not consumable–groceries, gasoline, dining out. Oh yeah–and beer.