Average American Spending by Income Level
How do Americans at different income levels actually spend their money? This tool uses the 2024 BLS Consumer Expenditure Survey — the most comprehensive U.S. household spending dataset — to show spending across 9 categories for each income decile. Select any bracket to drill into subcategories and see how it compares to the median household.
What the Data Reveals About American Spending
Housing takes the biggest bite at every income level
Low-income households (under $30K/yr) spend around 41–42% of all expenditures on housing alone. Even top earners spend about 29%. The national average is 33%. The rule of thumb — keep housing under 30% — is only achievable once income is well above median.
Retirement savings gap is enormous
The top income decile puts more than 6x as many dollars into retirement and pensions as the median household ($34,700/yr vs. $5,200/yr). The lowest-income households contribute just $455/yr — almost entirely mandatory payroll taxes (Social Security and Medicare), not voluntary retirement savings like a 401(k) or IRA.
Food spending barely doubles despite a 5x income gap
The highest-income households earn about 5x more than the median, but spend only about 2x as much on food ($19,400/yr vs. $8,600/yr). What changes is the mix — more dining out, higher-quality groceries — not the quantity. Food is a basic need with a natural ceiling.
Healthcare is a much heavier burden at low incomes
The lowest-income households spend 29% of their pre-tax income on healthcare — nearly 10x the share paid by top earners (3%). Top earners spend more in absolute dollars ($10,476/yr vs. $2,755/yr for the lowest bracket), but the income-share burden is where the disparity is most stark.
Many lower-income households spend more than they earn
The three lowest income deciles report spending significantly more than their pre-tax income: the lowest bracket spends $31,660/year on $9,612 of reported income; the second spends $38,473 on $23,805; the third spends $46,340 on $36,188. The 4th decile nearly breaks even. This gap is partly explained by government in-kind benefits (Medicaid, food assistance, housing vouchers) that aren't fully captured in the income figure, retirees drawing down savings, and students between jobs. It also reflects genuine financial precarity: when income is this low, housing and food alone consume most of it, leaving no room for savings and often pushing households toward debt.
How Spending Changes as Income Rises
The average American household spends $78,535/year ($6,545/month). But that figure masks wide variation — the lowest-income bracket spends $31,660/year while the highest spends $179,513/year, a 5.7x gap even though their incomes are 36x apart. The difference is savings rate: higher earners save far more of each additional dollar.
Each category follows a different curve as income rises:
- Housing scales slowly in absolute dollars but falls sharply as a share of income — from 35% of income at the median to 15% for the highest earners. The dollar gap between lowest and highest earners is about 4x.
- Food barely doubles from the lowest to the highest bracket despite a 36x income gap. This is Engel's Law: food is a biological need with a natural ceiling. What changes is quality and dining out, not quantity.
- Transportation scales moderately — the lowest bracket spends $4,341/year while the highest spends $29,636/year (6.8x) — driven mostly by more expensive vehicles at higher income levels.
- Retirement savings scale the most dramatically and represent the primary mechanism separating wealth-building across income groups. Top earners put 76x more into retirement and pensions than the lowest bracket.
How American Spending Compares to Budget Guidelines
Common personal finance rules assume a level of income flexibility that most Americans don't have.
The 30% housing rule — keep housing below 30% of gross income — sounds like a reasonable target, but BLS data shows it's only achievable for households earning roughly $94,000/year or more (the top 30%). At the median income (~$65,000/year), the average household spends 35% of income on housing. Below $30,000/year, housing costs exceed 50–67% of income. For the lowest bracket, housing costs alone exceed the entire reported pre-tax income.
The 50/30/20 rule (50% needs, 30% wants, 20% savings) is similarly out of reach for most. The bottom three income deciles contribute just 4–6% of income to retirement and pensions — and nearly all of that is mandatory payroll taxes, not voluntary savings. Even at the median, retirement and pension contributions are only 8% of income. Reaching a 20% savings rate requires income well above the median. These rules are useful aspirational benchmarks, but for most households below the 7th decile (~$94K/year), the realistic goal is building any savings buffer at all.
How to Use This Tool
The chart at the top shows spending allocation across all 10 income deciles simultaneously — useful for seeing the big picture at a glance.
Below it, select an income bracket from the dropdown to see a detailed breakdown with subcategories and how spending compares to the median household. Each category row can be expanded — for example, Housing breaks down into shelter/mortgage, utilities, household operations, and furnishings.
About the Data
All data comes from the Bureau of Labor Statistics Consumer Expenditure Survey (CEX), 2024 edition (published December 2025). The CEX is conducted annually using a national probability sample and represents the most comprehensive source of U.S. household spending data available.
Income groups are defined by pre-tax household income. "Consumer units" in BLS terminology are similar to households — people sharing a residence and pooling major expenses. The data represents averages within each income group, so individual households vary considerably around these figures.
The "Retirement & Insurance" category includes both voluntary retirement contributions (401k, IRA) and mandatory Social Security and Medicare payroll deductions, which is why it's larger than pure savings. Education spending represents out-of-pocket costs and does not include tuition paid through financial aid or student loans.
Frequently Asked Questions
What is the average American household spending?
According to the BLS Consumer Expenditure Survey 2024, the average American household spends about $78,535 per year ($6,545/month). Housing is the largest expense at $26,266/year (33%), followed by transportation at $13,318/year (17%) and food at $10,169/year (13%). These averages vary significantly by income level — the lowest-income bracket spends $31,660/year while the highest spends $179,513/year.
What percentage of income should go to housing?
The traditional guideline is to spend no more than 30% of gross income on housing. Nationally, the average household spends about 25% of pre-tax income on housing ($26,266/year on $104,207 average income). But the 30% threshold is only achievable once income reaches roughly $94,000/year (the 7th income decile). Below the median income of ~$65,000/year, the average household spends 35% of income on housing. The lowest-income bracket devotes 42% of all expenditures to housing — and their housing costs exceed their entire reported pre-tax income.
How much do Americans spend on food?
The average American household spends about $10,169/year on food, split roughly 61% groceries ($6,224) and 39% restaurants and takeout ($3,945). Food spending ranges from about $5,300/year for the lowest-income households to about $19,400/year for the highest. The share of budget devoted to food declines as income rises — economists call this Engel's Law. What changes at higher incomes is mostly quality and dining out, not quantity.
How much do Americans spend on healthcare?
The average American household spends about $6,197/year on healthcare. As a share of income, the burden falls hardest on low earners: the lowest-income households spend about 29% of their pre-tax income on healthcare, compared to just 3% for the top income decile. In absolute dollars, top earners spend more ($10,476/yr vs. $2,755/yr for the lowest bracket), but the income-share disparity is far more striking.
How much should I save for retirement each month?
Most financial advisors recommend saving 10–15% of gross income for retirement. The BLS data shows average households put $9,797/year into personal insurance and pensions (which includes Social Security and Medicare payroll taxes, not just voluntary savings). Retirement contributions scale dramatically with income — top-earning households put 6.6x as much as the median household ($34,737/yr vs. $5,244/yr), and 76x as much as the lowest-income bracket ($455/yr). A useful starting target is to maximize your employer 401(k) match before adding other savings.
What counts as household spending vs. income?
The BLS Consumer Expenditure Survey measures spending by 'consumer units' — people who live together and share major expenses, similar to a household. Income before taxes is used (not after taxes). Some categories like personal insurance and pensions include both voluntary retirement contributions (401k, IRA) and mandatory payroll taxes (Social Security, Medicare) — so the figures aren't purely discretionary spending.
Does higher income mean proportionally more spending?
Yes, but not proportionally. The top income decile earns about 36x more than the bottom decile but spends only about 5.7x more ($179,513/yr vs. $31,660/yr). Higher earners save far more of each additional dollar. The starkest gap is in retirement savings — top earners put 76x more into retirement and pensions than the lowest bracket. Necessities like food and healthcare grow much more slowly with income than transportation, housing, or savings.