What Are the Average American’s Monthly Expenses?

Money’s tight for just about everybody right now (thanks, inflation). As you look for ways to cut costs, you’re probably wondering, What are the average American’s monthly expenses? Is everyone spending this much on food?

News flash—everyone’s situation is different. After all, if you have kids, you’re guaranteed to spend more on milk and cereal than Phil and Janice, the retired couple next door. (Phil’s more of an oatmeal guy anyway).

There are folks at the Bureau of Labor Statistics who keep track of what Americans spend on everything from cereal to housing. And they say the average monthly expenses for an American household add up to about $6,081. That equals $72,967 per year.¹

But if you’re budgeting and looking for ways to cut your expenses, don’t settle for average expenses.

In school, in life and in business, being above average is great. But when it comes to household expenses, below average is where you want to land. Yep, you’re shooting for a D-minus. Don’t settle for normal, because normal is broke, and the average, normal American spends hundreds of dollars a month on credit card and car payments. No thank you.

Let’s dig into the numbers a little more and see how household size affects average monthly expenses.

What Are the Average Monthly Expenses by Household Size?

Mom, Dad, two kids, one dog, a house and a picket fence—the American Dream. But that dream comes with a pretty hefty price tag.

• The average monthly expenses for a family of four range from $7,875 to $9,168 (depending on the ages of your kids).
• For single folks, the average monthly expenses are $4,337.
• For married couples with no kids, monthly expenses are $7,111.²

No surprises here, right? The more people you have living in your home, the more you spend. But where’s all that money going? Let’s take a look at the 10 major categories of household expenses. And remember, these are averages, so they could vary a lot based on the size of your household and the cost of living in your part of the country.

What Are the Main Household Expenses?

The 10 major categories for household expenses and their share of the total expenses for average Americans are:

• Housing: 33.3%
• Transportation: 16.8%
• Food: 12.8%
• Personal insurance and pensions: 12%
• Health care: 8%
• Entertainment: 4.7%
• Other expenditures: 4.1%
• Cash contributions: 3.8%
• Apparel and services: 2.7%
• Education: 1.8%³

Keep in mind, these are not recommended budget percentages. They’re what the average American spends. But you don’t want to be average, right?

Next, let’s dig into what each expense category includes and break them down by the average monthly cost for each. Plus, we’ll give you some ideas for how you can come in below average for some of these costs.

Housing: $2,025 per Month

This probably isn’t news to you, but the biggest expense for singles, married couples and couples with kids is housing at $2,025 per month.⁴ Keeping a roof over your head costs a lot of dough. And this category doesn’t just include rent and mortgage payments. It also includes property taxes, homeowners insurance, repairs, gas and electric bills, and furniture. To avoid being house poor (aka spending too much money on housing), keep your rent or mortgage (plus insurance, taxes and any HOA fees) at no more than 25% of your take-home pay.

If you want to save money, maybe living rent-free in your parents’ basement and eating your parents’ food really is the way to go. Um, no. (But a weekend visit to get a plate of Mom’s famous meatloaf and mashed potatoes is fine.)

Transportation: $1,025 per Month

Airline tickets, gas, insurance, repairs and . . . ugh, car payments—all that adds up to $1,025 a month.⁵ We love our cars in the good ol’ U.S. of A. The average monthly payment for a new car is $726!⁶ And that’s why paying cash for a car is the way to go. Don’t throw hundreds of bucks a month into something that goes down in value as soon as you drive it off the lot.

Food: $779 per Month

It’s probably no surprise that food is number three on the list at $779 per month.⁷ Americans love to eat. Hey, we invented cheeseburgers! Monthly food expenses are split between food at home ($475) and food away from home ($303). So on average, Americans spend about $172 more a month on groceries than food from restaurants.

If you want to cut your food budget—both at home and at restaurants—start meal planning! When you plan your meals before you head to the grocery store, you’ll be more likely to buy only the stuff you need—and skip impulse buys. Having a plan will also keep you from making an expensive trip to a drive-thru because you didn’t know what to make for dinner.

Personal Insurance and Pensions: $729 per Month

At $729 per month, personal insurance and pensions are just a little bit less than food.⁸ This might make you scratch your head, but let’s dig deeper. Personal insurance is basically another name for life insurance, and this category is about $43 a month for an average American.⁹ We recommend term life insurance, because all the other types of life insurance are rip-offs.

Now, you might be wondering, Why does the average working American spend over $700 a month on a pension—especially since most Americans don’t have a pension plan? Well, that’s because the BLS lumps the Social Security tax into this category. That’s a 6.2% tax that comes out directly from your paycheck.

Health Care: $488 per Month

The $488 per month for health care includes the cost of health insurance premiums and out-of-pocket costs for medical services and prescriptions.¹⁰ It’s a pretty big line item for most Americans, especially if you have a family. And it went up by 7.3% in 2022.¹¹ You can’t lower health care costs very much by cutting back, but there are other ways to save money on health insurance, like staying in-network when you can or taking advantage of a Health Savings Account.

Entertainment: $288 per Month

The $288 that Americans spend on entertainment each month isn’t just buying tickets to see the latest Dwayne “The Rock” Johnson movie.¹² It includes things like televisions, streaming services, countless hobbies (bird watching, anyone?) and pets. Yes, dogs are technically a form of entertainment (we always thought they were extra family members). FYI: The average American spends $62 a month on pets.¹³

Other Expenditures: $246 per Month

The $246 other expenditures category is a catchall for lots of different expenses: personal care products and services, books, alcohol, tobacco and miscellaneous items.¹⁴ This category is like that drawer in your house that collects scissors, loose change, gum wrappers and a pile of stuff you probably don’t need. While toothpaste and tequila are essentials (just kidding about the toothpaste), you can probably trim back some other expenses (hint: they rhyme with schlottery stickets).

Cash Contributions: $230 per Month

Charitable giving is a big part of the $230 in this category, but it also includes alimony and child support payments.¹⁵ In addition, cash contributions include any money you spend on room or board for a college student—whether they show up for their 8 a.m. chemistry class or not.

Charitable giving is one area where we actually recommend being above average. Generosity shifts the focus off of ourselves (our problems and our financial shortcomings) and reminds us of our blessings. We recommend giving 10% of your income to a church, charity or other worthy cause.

Apparel and Services: $162 per Month

So, $162 per month for clothes and services could vary a ton based on the size of your family and whether or not you have a shoe problem on the level of Carrie Bradshaw.¹⁶ And since we’re on the topic of shoes, the average monthly amount for footwear is $33.¹⁷ Besides clothing, this category includes dry cleaning and jewelry.

Education: $111 per Month

Remember, $111 a month for education is an average of all Americans.¹⁸ So if you’re paying for a kid (or kids) to go to college or a private school, this expense is going to be way higher. The average cost of college tuition for an in-state school is $9,349 a year ($779 per month).¹⁹ Yikes! That’s more than the average cost of food—which, in case you’ve been living off the grid, has been on a big-time rise lately.

How Has Inflation Impacted Monthly Expenses?

Prices on just about everything have gone up in the last year thanks to inflation. And that means expenses for most Americans have gone up. The annual inflation rate for all items as of October 2023 was 3.2%.²⁰

But some expenses went up more than 3.2%. The cost of food was up 3.3%. Shelter (aka housing) was up 6.7%. One piece of good news: Energy bills went down by 4.5%. The moral of the story? For most things, you have to spend more money just to keep your same standard of living.

Create a Budget for All Your Expenses

So, those are all the numbers for monthly expenses. Read ’em and weep . . . or maybe just cringe a little. But don’t worry—there is something you can do about it. If you’re looking at some of these monthly totals and thinking your numbers are way too high—or really have no idea what your actual expenses are—you need to create a monthly zero-based budget.

A budget helps you tell every single dollar where to go so you don’t get surprised by expenses. And the EveryDollar app can help you do just that and figure out budget percentages that fit your life. You work hard for your money, so all of it should work hard for you.

Check out EveryDollar today!