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Without a budget — or come to think of it, even with one — you may wonder how your average monthly expenses compare with "what's normal. The average monthly expenses reported here are from the Consumer Expenditure Survey conducted by the U. Bureau of Labor Statistics and released in September — the latest data available. Family size doesn't necessarily mean two parents and children. A household might have any number of configurations among parents, grandparents, children and unrelated people living together.
Yes, we do note that a family of five has lower monthly expenses than a family of four, according to the BLS. Also, it's worth noting that monthly averages can be misleading in some cases. Keep in mind that many of these expenses are intermittent. This is the largest part of the average American's budget: About one-third of people's total spending goes to accommodation.
Any renter or homeowner will tell you that this is shockingly low. One reason for the low numbers is that the survey excludes mortgage principal payments -- they're considered loan repayments.
They're not paying mortgage interest or refinance charges, though they're still paying other costs associated with homeownership. Data can show vastly different snapshots of American life depending on how it's collected. For example, Hotpads found that the median U.
The BLS figure includes rental units in urban, rural, and suburban areas. Tons of things. It's easy not to notice how much we spend on transportation each year. If we take public transit, we pay for our passes by the month. If we own vehicles, we pay for a tank of gas here, a tire rotation and alignment there. We pay for car insurance monthly or biannually, depending on the billing option we choose.
We make a lot of mistakes in how we think about money. These mistakes affect our spending behavior, and how we build our budgets. One of those mistakes is mental accounting. It causes us to feel like driving is "free" because we don't pay for our vehicle use at the exact time we get in the car.
We can easily lose track of the true cost of vehicle ownership and what the alternatives -- rentals, ridesharing, public transit -- might cost us instead. It's also the loaf of bread, jar of peanut butter, bear of honey, and bag of apples or Doritos we buy for a road trip.
It includes fast food, takeout, delivery, dine-in, concession stands, vending machines, pretzel stands, and food trucks. It even includes college kids' on-campus meals and the Spanish buffet your friend served at her wedding. This finding from a USDA-funded study suggests there may be room for us to reduce our food budgets. The insurance category excludes homeowners and auto insurance.
It includes premiums for life insurance, personal liability insurance, accident insurance, and disability insurance. The pensions category is funny, because it includes things we would view as saving: The Social Security contributions withheld from your paycheck and contributions to various retirement programs.
But it might also be a good idea to put more resources toward life and disability insurance. Do these numbers sound low? About 8. Still, it's surprising that the Consumer Expenditure Survey number isn't higher since it includes medical care in retirement communities and nursing homes, and medical care for seniors isn't cheap.
We all like to spend money to have fun. If we did nothing but work and pay bills, and never rewarded ourselves, we wouldn't feel as motivated to keep at it. So how do we spend our fun money?
While clothing is a necessity if we want to stay warm and be accepted by mainstream society, most of us spend far more than necessary in this category.
We spend extra on clothing because we like variety or we like fashion. We want to impress people or convey our status. And we don't want to do the laundry every single night. But if you live in the average-sized household of 2. How much apparel do we really need? Try it for just a couple of months by visiting top-notch thrift stores and looking online for gently-used clothing and footwear. Especially when it comes to clothing you'll only wear once, like holiday party dresses or wedding attire, don't fork out the cash and buy second-hand or even just rent instead.
If you're posting pictures on social media, you may not want to reuse an outfit. You'll save a bundle. Cut this cost by negotiating a lower monthly plan with your provider or switching to a cheaper one, and purchasing gently-used second-hand cellphones instead of buying brand new models the day they come out.
You can also cut down on your internet usage and avoid overage charges by using free wifi whenever possible. While using a Budget Planner is a great step in gaining control of your finances, it also helps to know how much you should be spending. If you're finding it difficult to make ends meet, or just want some free financial advice on how to make your budget work better, contact us today and we'll set you up with a free counselling session with one of our expert credit counsellors.
Leave a Comment. Easy money management is possible with our all-in-one budgeting template. Take the first step towards achieving your money goals by downloading this easy-to-use tool! Get Out of Debt. Call Us At: 1 October 06, By: Adriana Molina.
Savings Regardless of how much or how little you earn, you should always be squirreling away some of your monthly take-home pay for yourself. Clothing Most of us don't have enough time to go shopping every month and that's a good thing , but averaging our spending throughout the year brings this living expense category to 2. Medical In Canada, we're lucky to have our healthcare system, but we still need to cover costs like dental work, glasses, and contact lenses; specialists like optometrists, physiotherapists, and chiropractors; and other over-the-counter medicines.
Categories Causing Canadian Debt It can be a bit difficult to generalize about the sources of debt that people accrue. Food One thing is for sure: Canadians love to eat! Personal and Discretionary Personal and discretionary expenses, like grooming, entertainment, and gym memberships can really add up. Household Operations There are a number of ways to cut these household expenses down. Clothing Did you know we only use about 20 per cent of our wardrobe?
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