How Does the Average Family Budget Compare to Yours?

Would you be insulted if you were average in the romance department? How would you like to be called an average performer at your job? Do your friends think that you look average compared to everyone else?

I’d say your average person dislikes being average. Average has almost become a pejorative in American culture. These days, it is something synonymous with being lazy or not putting forth effort. We are obsessed with being more than average. So, if you want to avoid the average family budget, it helps to know what it is.

What is the Average Family Budget?

The Bureau of Labor Statistics regularly publishes consumption surveys, which we can use to give us an idea of the average budget for an American family.

Category  Total Amount Percent of Total
Housing  $  16,557.00 34.42%
Transportation  $    7,677.00 15.96%
Food  $    6,129.00 12.74%
Insurance and Pensions  $    5,373.00 11.17%
Other  $    3,379.00 7.02%
Healthcare  $    3,157.00 6.56%
Entertainment  $    2,504.00 5.20%
Apparel  $    1,700.00 3.53%
Cash Contributions  $    1,633.00 3.39%
 $  48,109.00


Top Three Categories Make Up 63% of the Family Budget

A large majority of the average family budget is made up of only three categories: housing, transportation and clothing. If you want to cut expenses and have a large impact on your finances, these are the areas worth investigating. Even small cuts to one of these areas will have a big impact on your spending.

Gasoline is Not the Largest Cost of a Car

At a cost of $7,677, transportation is the 2nd largest category for the average family budget. While spending on gas each month tends to be painful, it is not actually the largest cost of owning a vehicle. According to the BLS, the average family spends $2,715 on gasoline. That’s about one third of the overall budget. The biggest portion of this category is actually purchase price of a car or car payments. In other words, saving on a car is mostly about managing the costs of buying.

Eating Out Eats a Lot of the Food Budget

Eating away from home makes up about 40% of the average family’s food budget and totals $2,505 annually. Meanwhile, the average grocery bill is only $302 per month. Clearly, the average family can save a lot in food spending, by cutting back on eating out.

Health Insurance is only the 6th Largest Category

Based on official category titles, it’s hard to know where your health insurance costs go, because there is a healthcare category and an insurance category. However, the confusion does bring up an interesting point.

Health insurance is represented by the healthcare category. At $3,157, it’s actually far down the list of categories at 6th on the list by total cost spent. The average American family is paying roughly $263 per month on healthcare. Meanwhile, the insurance category is further up the list at 4th and is most comprised of your social security payments.

While health care costs are important and a concern, we spend far more on entertainment and eating out put together. Health insurance is a cost worth watching, but definitely not the largest expense families deal with.

Beating the average family budget can actually be a challenge. The average family spends only $1,379.75 on housing per month. That includes mortgage/rent, utilities, cleaning and maintenance. The average grocery bill is only $302. Gas is only $226.25 per month.

That’s not to say that there isn’t lots of room for improvement, but I suspect that many of you will find at least some of the average budget categories difficult to beat. I know personally, that my family spends far more on gasoline. Although I believe we come in a bit lower on overall transportation, because we‘ve paid off one of our cars.

While the word average tends to be associated mediocrity, my guess is that most people could improve their finances if their budget were average.

How does your family budget compare? What categories are you spending more than the average family? What categories are you out performing? What factors make your spending higher or lower than the average family?


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  1. says

    What an interesting article. It provides an interesting perspective into American culture that we spend almost twice as much on entertainment as we do on cash contributions. I was also genuinely surprised by how low the average grocery bill is… it seems like it would be very difficult to spend less than $300/month.

    Nice work!

    • John says

      If you ate all your food at home, $300 would be a challenge. However, the average family is spending almost as much eating out every month.

    • Bryce says

      My wife and I eat at home for about $200/month. We also don’t spend much on entertainment. We’ll go to a movie once every couple months and occassionally buy a cheap dvd. We do have hulu plus and netflix subscriptions though (less than $20/month).

  2. says

    Because we’re lucky enough to be debt-free and live in a country that provides guaranteed, affordable health insurance (with no deductible or co-pays), and we work from home and chose to live in a community where we can use transit or walk/bike a lot, our budget looks nothing like the ‘average.’ Our largest expense category is food. Next is utilities: electricity, firewood, fuel oil, water, sewer, trash pick-up, cable, Internet access. After that would probably be entertainment, recreation, and travel.

    • John says

      That’s great. Are any of the categories a challenge? My family has a similar list to the average, buy total cost wise, we are way below on almost all categories.

      What nation are you buying healthcare from?

  3. says

    Amazingly my spend is almost at par with national average. Transportation is 80% of average but other cost is more and so is the travel/vacation, which you might have classified in entertainment.

    • John says

      Some national averages are almost ridiculous in how much people spend. However, I feel like this is one where the numbers really do make sense. These same categories look very similar to my own budget.

  4. says

    Like Curt, we don’t relate much to this average – especially since retiring.

    Our biggest expense is taxes!!!
    Since we have our house paid off, don’t drive to work (and buy less expensive cars and keep them for a very long time) our transportation expenses are minimal. We eat out maybe one time every couple of months and spend our entertainment budget usually. on TV

    • John says

      Here’s the interesting thing in the BLS survey; they leave out taxes completely. I suspect it’s because taxes would probably be second or third on the list. If you properly added SS and Medicare, it would be close to first on the list. Whatever the reason, data for BLS is after tax.

  5. says

    Great post! I must admit that when we have not realized how bad our finances were, savings and investment was our last priority. It must have been approximately 1% of our annual budget. Housing, food, and entertainment were top three. Now that we have turned the table, housing, food and savings/investment are our top three priorities, where most of our money goes to. We rarely dine out and watch movie now, instead we looked for other ways to have fun and keep ourselves entertained without spending much, such as stroll in the park, tour in the museum, or reading books at the public library.

    • John says

      That’s a great way to look at it. How can you make saving/investing one of the top categories. I hadn’t thought about using a budget as a way to motivate savings like that.

      • Bryce says

        I kinda do the same thing, but savings still isn’t close to the top of my budget. But I have budgeted savings each month that goes into my savings account (totals around $350/month): House savings, student loan savings, vacation savings, utilities savings (water bill every 3 months and helps compensate if I get a higher than budgeted utility bill), and general savings. Then at the end of the month, whatever is left over (usually $500-900 depending on the monoth) gets put into one of the above accounts.

  6. says

    Very interesting! Most of our categories are much lower. And thankfully neither of us has to pay for healthcare (our work pays 100% for each of us), so that’s not even a category for us.

    • John says

      Congrats on your success in beating the average family budget. Any thoughts to how you’ve been such a success?

  7. says

    I agree about cutting out a large chunk with getting rid of eating out. That’s one of the ways that my wife and I are able to do the things that we really enjoy (like traveling) while still saving for retirement.

  8. says

    Wow… We spend less in housing, transportation, food, healthcare, entertainment, and apparel. Way less. And I’m pretty sure we save and give more, if I’m interpreting these categories correctly. But I guess that makes sense because we don’t have any kids yet, we have paid-for cars and don’t drive much, our employer pays 100% of our healthcare premiums, and we rent.

    • John says

      It could be. The BLS’ survey is based on a household of 2.5 people. You could check the percentages of your budget and see how they match; if housing, transportation and food are the same percentages.

  9. says

    My budget looks a lot different, but I am a single guy, not a family. It is concerning to see about 18% of money going to insurance and healthcare. Something is broken that we spend that much there.

    • John says

      The insurance category is most social security. However, note that income tax is not part of this budget. If I were to string out income taxes, payroll taxes and state taxes, taxes would take the cake, by a landslide.

  10. says

    The average housing expenses seem low, but that’s probably because I live in a high cost of living area. That’s the stat that jumped out at me, and one that gets me thinking about eventually – as in maybe 15 years from now – moving to a lower cost of living area.

    • John says

      Since its the number one item you will spend money one. You’ll do wonders for your longterm finances.

  11. says

    It would be interesting to know if this budget data reflects the situation of a regular American family with one or several kids. The larger the family, the bigger the expenses, so it does make a difference how many children have been included.

    • John says

      It’s loosely based on about a family of 3. However, you are right. budgets will vary on size. However, studies from the Department of Agriculture has shown the per person cost of a child tends to decrease with a larger family, so it’s a marginal difference and not an exponential one.

  12. Melly says

    This is not very accurate. What about people who are unemployed or who make a low wage, and/or are on government assistance? These people make up a large part of the population. This looks like the budget of two people who both make over 50,000 a year.

    • John says

      It’s the numbers for the “average” family. It’s actually a blend of a budget for a two person and three person family. I’ve found that if the numbers aren’t accurate, the percentages of expense categories are pretty close. Meaning that no matter what income you have, housing tends to be a little more than a third of your budget. Car/transportation is about a sixth and so is the grocery bill.

      I greatly appreciate your suggestion. I think it’s about time I look at budgeting for struggling families. I’ll pull the data together and You can expect a post in the days that follow!


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