How the Average American Family Spends Their Income – And How to Trim It

I’ve often wondered how the typical household budget is spent. Several times in 2009, I came across this thoroughly interesting infographic, originally from

The link now goes to an updated video of how the average American spends their paycheck.

The picture depicts how the average American family spends their income based on Department of Labor data. For those without the visuals, I’ll break the info on the chart down into a list for you.

Household Budget Breakdown

Housing – shelter – $10,023
Pensions, Social Security – $5,027
Housing – utilities, fuels, public services – $3,477
Food – food at home – $3,465
Transportation – vehicle purchases – $3,244
Transportation – other expenses and transportation – $3,130
Healthcare – $2,853
Entertainment – $2,698
Food – food away from home – $2,668
Transportation – gasoline, motor oil – $2,384
Apparel and Services – $1,881
Cash Contributions (optional retirement and cash savings) – $1,821
Housing – household furnishings, equipment – $1,797
Education – $945
Housing – household operations – $984
Miscellaneous – $808
Housing – housekeeping supplies – $639
Alcoholic Beverages – $457
Personal Care – $588
Life, other personal insurance – $309
Reading – $118

For many people, this describes some form of their annual budget. Yes, some numbers are higher for some of us and other numbers are lower, but this really is a rough approximation of how we all spend our money.

How Is This Useful?
If we step back for a moment and look at this “budget,” it’s clear that there are ways in each category to reduce our spending.

This list is composed of twenty one entries, so each day for the next three weeks, I’ll tackle a single entry on this list, looking at both small and big ways to reduce spending in that area. For each one, I have at least ten ways to trim spending in that area – some big, some small, but all capable of improving your financial state.

Some of the tips will be useful to you – some of them won’t be and will apply better to someone else. The key to making your story successful is to look for the tips within each category that work for you and apply them in your own life and not worry about the rest.

In the comments of each one, I’m charging you with picking one or two of the tips that you think are the most useful for the average American. Once the series is finished, I’ll pick the three most popular tips in each category and make one “mega-post” detailing all of the popular items. It’ll be something of an ultimate “trim your budget” guide.

Trim Your Budget Series: How To Save Money for the Average American Family

Alcoholic Beverages


Buying a Car
Eating Out


Food at Home

Gas and Oil

Home Energy Costs

Household Furnishings

Household Operations
Housekeeping Supplies

Housing and Shelter
Life Insurance


Transportation Expenses

Pension and Social Security
Personal Care and Hygiene



Trent Hamm

Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.