BofA Infographic: How American household budgets vary

[RobertBirnie]

I found this interesting as a frame of reference on my spending, was good to showcase some of the areas where I know I'm horrible in my spending (food!) and show just how horrible I am. 

How American household budgets vary
https://www.bankofamerica.com/deposits/manage/average-family-budget.go

For myself, housing is slightly higher because I'm in SF Bay Area (I pay $1900, super low for Bay Area standards but high nationally). Transportation much lower (thanks mustachianism! kept my wife from wanting to always have a car payment!). And then Education way higher because I'm finishing off loans ( Only 3 months left though! yaaay!). And then retirement is also multiples higher, go mustacianism!

(Hope no one has posted this link, I couldn't find it in search.)

[fattest_foot]

I don't know why I'm all that surprised, but some of those expenses are obscene. $800+ on transportation!

And based on the fact that something like medical seems so low (we spend almost $400 on just insurance for my wife and I), I have to assume that this is per person. So for a couple that's well over $1,000 in transportation. And probably close to $1,000 for food. Don't forget $500 a month for entertainment.

I guess people are WAY worse with money than I thought.

[Mississippi Mudstache]

Cool graphic. My wife (27) and I (31) are firmly in the 25-34 bucket. We spend about average on food ($500/mo, including restaurants) and housing ($1300/mo). We are way above average on healthcare (~$1000/mo) and we always will be but there's nothing we can do about that (except maybe moving to a country with socialized healthcare) . We are below average on transportation (maybe $300 when you consider the amortized cost of our Prius over 7-8 years), education ($0), and entertainment (<$100). I have no idea what they mean by pensions. Does that include 401ks? Seems stupid to lump pensions/retirement savings with insurance anyway. They are completely different things (or at least they should be).

[EricP]

Based on the hyperlink, I'm guessing it's by household not person.  I'm thinking the low health care cost is because generally children are relatively cheap and there are a lot of families being subsidized or on Medicaid. (or with no insurance)

[jorjor]

If it's just pulling from the BLS Consumer Expenditure Survey, then this is the definition of a consumer unit: "Consumer units include families, single persons living alone or sharing a household with others but who are financially independent, or two or more persons living together who share expenses." http://www.bls.gov/news.release/pdf/cesan.pdf

[jorjor]

I am 27, wife is 30. We are higher than our age bucket on housing, about average on food/entertainment depending on how you categorize each (working on dropping this down by planting a garden next year and less eating out), low on healthcare on average (good employer-paid plans, most years we actually "make money" off the plan once you factor in the HSA seed), low on transportation, and currently low on education (though if you spread out already-paid student loans and future child education savings, it probably ends up about even).

The trick will be not following that upward slope on some of those lines as we age, and actually have inflation-adjusted downward sloping lines for things like housing and transportation as we eventually pay off our house, don't buy new cars, etc.

[BBub]

Interesting.  We are in the 25-34 bracket as well.  We came in:

Lower on food
Lower on transportation
Lower on housing
Lower on healthcare
Lower on Education
Way Higher on entertainment
Way Higher on retirement savings

I guess we've been under-spending on the boring stuff, overspending on the fun stuff & socking away the remaining giant surplus!  Hey, that's the idea.

[ClassyCat]

Those transportation costs blow my mind for every age group. I know long commutes can be expensive, but damn. I wonder what percentage is car payments versus fuel and maintenance.

[beltim]

Those transportation costs blow my mind for every age group. I know long commutes can be expensive, but damn. I wonder what percentage is car payments versus fuel and maintenance.

In 2013, 6.4% of household spending was on vehicle purchases, 5.1% was on gasoline, 5.1% on other vehicle expenses, and 1.1% on public transportation.

[BBub]

Those transportation costs blow my mind for every age group. I know long commutes can be expensive, but damn. I wonder what percentage is car payments versus fuel and maintenance.

In 2013, 6.4% of household spending was on vehicle purchases, 5.1% was on gasoline, 5.1% on other vehicle expenses, and 1.1% on public transportation.

Wow.  In other words the avg hhld spent about $1 of every 6 on transportation.

[RangerOne]

Non-college millennials must really be bringing down the education number. I have known a few college students with no debt for various reasons. But the majority of the people I know have at least a $300 dollar monthly student loan burden.

And that is super low for those with professional or masters degrees. Most of use are spending more like $1000 on average per month on education. To either deal with a crazy loan or pay down a few small ones as fast as possible. But I guess this is still a minority of the population.

Transportation cost looks crazy. But most people still buy pricer cars, even used ones and have a payment. Plus gas and maintenance you will easily hit that number. Its crazy considering this country has some of the cheapest gas and cars in the western world. Thank god for this blog or I would have replaced my college car and wouldn't be taking the bus.

I need to work on my food budget though, we spend way way too much being in San Diego and getting too many meals to go.

[beltim]

Those transportation costs blow my mind for every age group. I know long commutes can be expensive, but damn. I wonder what percentage is car payments versus fuel and maintenance.

In 2013, 6.4% of household spending was on vehicle purchases, 5.1% was on gasoline, 5.1% on other vehicle expenses, and 1.1% on public transportation.

Wow.  In other words the avg hhld spent about $1 of every 6 on transportation.

Yes. Pretty standard though: even in Europe transportation spending accounts for over 13% of household spending, with much lower vehicle ownership. http://ec.europa.eu/transport/strategies/facts-and-figures/all-themes/index_en.htm

[Spork]

Those transportation costs blow my mind for every age group. I know long commutes can be expensive, but damn. I wonder what percentage is car payments versus fuel and maintenance.

In 2013, 6.4% of household spending was on vehicle purchases, 5.1% was on gasoline, 5.1% on other vehicle expenses, and 1.1% on public transportation.

I would guess you also need to add in there: insurance, licences/fees/registration, loan interest & depreciation.  Whenever I've seen the AAA survey of costs per mile, it's depreciation that is the absolute killer.

[beltim]

Those transportation costs blow my mind for every age group. I know long commutes can be expensive, but damn. I wonder what percentage is car payments versus fuel and maintenance.

In 2013, 6.4% of household spending was on vehicle purchases, 5.1% was on gasoline, 5.1% on other vehicle expenses, and 1.1% on public transportation.

I would guess you also need to add in there: insurance, licences/fees/registration, loan interest & depreciation.  Whenever I've seen the AAA survey of costs per mile, it's depreciation that is the absolute killer.

Depreciation doesn't make sense because you're already counting the purchase price. The other are in "other vehicle expenses"

[Jack]

Also in the 25-34 bracket:

• Lower on food
• Lower on transportation (this was true even when I had a 60-mile round-trip clown-car commute, in a 4x4!)
• Lower on housing
• Way higher on healthcare (I get almost exactly the average -- $182 -- withheld per pay period just for the premium on my wife's high-deductible plan!)
• Way higher on Education
• Lower on entertainment
• Way higher on retirement savings

[Jags4186]

Hm interesting.  Since the average household income in the U.S. is a little over $50,000/yr before taxes, I find it interesting how everyone above age 25 is spending sifnificantly more than that... 

[Seppia]

Those transportation costs blow my mind for every age group. I know long commutes can be expensive, but damn. I wonder what percentage is car payments versus fuel and maintenance.

In 2013, 6.4% of household spending was on vehicle purchases, 5.1% was on gasoline, 5.1% on other vehicle expenses, and 1.1% on public transportation.

Wow.  In other words the avg hhld spent about $1 of every 6 on transportation.

Yes. Pretty standard though: even in Europe transportation spending accounts for over 13% of household spending, with much lower vehicle ownership. http://ec.europa.eu/transport/strategies/facts-and-figures/all-themes/index_en.htm

My god my eyes hurt!
My wife and I spend around $200 combined on transportation
$115 monthly subway for wife
$35 monthly subway for me
$25 combined per month Citibike cost

Housing is just shy of double (NYC :( )
Food is below and we live in NYC!
Entertainment is way above because we travel a lot, we spend probably around $8000 per year (we "have" to take two intercontinental flights per year just to see our family though, but we do love our vacations)
health insurance is fully paid by our companies so below
Retirement savings are significantly higher too (NYC helps)

[beltim]

Hm interesting.  Since the average household income in the U.S. is a little over $50,000/yr before taxes, I find it interesting how everyone above age 25 is spending sifnificantly more than that...

The average income in this group is $63k before taxes.  Your number (50k) is median, not mean.

[Dexterous]

Interesting stuff.  The total cost of food, transportation, housing, healthcare, education, and entertainment for my wife and I is the same amount as just the housing cost for someone my age.  ~$1400

[Caoineag]

This is my first time seeing this particular one but I have also ran my numbers against the actual consensus household budget numbers as well. In both cases we are doing exceptionally except for the food budget...

On a positive note, every time I have significant time off, the food expenses drop since I start cooking at home more. So once I retire the food budget issue will resolve itself.

[Mississippi Mudstache]

Non-college millennials must really be bringing down the education number. I have known a few college students with no debt for various reasons. But the majority of the people I know have at least a $300 dollar monthly student loan burden.

There are plenty of college-educated Millenials who have little to no student loans. The median debt held by recent college graduates is still well under $20,000. I got two degrees without debt (mostly because of scholarships, but I also worked 4/5 years I was in college). My wife had $36,000 in debt when she graduated. The state forgave $9,000 of that when she worked as a teacher for a year, and we paid the rest back before a single dime of interest accrued.

[iamlittlehedgehog]

Damn. Those are high expenses. DH falls in the 35-44 range, I'm just below in the Millenail range. We come under in:

Food
Housing
Education (for now)
Entertainment

But our transportation and medical is way above average so I think it washes out all the same in the end for us :/

[Seppia]

By the way just an observation: housing is probably the worst benchmark among those, because it heavily depends on location, and the mustache size has relatively little impact (compared to say: restaurant expenses).
If you happen to have a job in Manhattan like my wife and I the very best you can do is be above average.
On the other hand if you live in say Arizona or Nevada it's very hard not to be below.

True, some people can keep their job independently from location, but others cannot (one of the most extreme examples being my wife: in her line of work about 99% of the jobs in America are in the New York City area)