All about Average American spending habits

Darryl Bachmeier
Oct 2, 2020

America is currently the world’s biggest economy which is majorly due to its high consumer spending, contributing about 70% of its $20 trillion economy. Multiple factors such as low unemployment, young population, technological innovation, and high average incomes have contributed to America’s fat economy. That being said, have you ever wondered how the people living in the world’s biggest economy spend their money? In this article, we’ll go over the spending habits of average Americans, and also try figuring out any major issues in the way their economy works right now.


A major chunk of US household’s income is spent on housing. This can be mortgages, rental payments, utilities, and household equipment. With a growing population, the demand for housing continues to grow in America, and considering the high costs associated with owning a house, it is no surprise that around 30% of the income is spent on housing-related expenditures. The good part however is that there are still around 20 million US citizens who do not have any mortgage, making their monthly budgets much more manageable.


Other than housing, US citizens spend a lot of their hard-earned income on transportation expenses which include vehicle purchases, gasoline, and other transportation costs such as car insurance. Utilizing public transportation or energy-efficient modes of transportation, however, is a viable option to cut down these expenses from the monthly budget.

Health Care

Next on our list is health care. Healthcare-related costs, particularly health insurance is a major issue faced by US citizens, as insurance costs have been rising at an accelerated pace for quite some time. What makes this matter worse is that you can’t practically afford healthcare in the US without insurance due to the enormous costs involved, making the insurance premiums a necessity for everyone. People with good-paying jobs that provide insurance coverage are, however, relatively better off than others.

Food and other goods and services

Americans pay top dollar for food, entertainment, and apparel. Ever since the pandemic, consumers have shifted their focus to take-out food and streaming services as well. For instance, Netflix reported that it gained 28.1 million new subscribers in the first nine months of 2020. Similarly, around 30% of Americans reported that they spent more on streaming services in 2020 than they did previously. With multiple parties and industries losing out on billions of dollars due to the pandemic, a few industries prevailed, with streaming services being one of them. Americans are also fond of spending their money on alcohol, including wine and beer, along with throwing cash on tobacco products, with vapes rising in popularity and acceptability in comparison to cigarettes. Overall spending on electronics and home entertainment has been picking up steam as well, with a recent survey stating that 19% of Americans spent additional money on technology due to everything going digital last year. Expenditures on home entertainment which consists of video games, television, and home theater systems have risen recently too. Finally, Americans are fashionable people as approximately 3.3% of US household income is spent on clothing, clothes rental, and related accessories.

Considerable Issues

Americans are known to be highly consumeristic. While this may be good for the economy, this is a bad sign regarding managing personal finance. A recent survey showed that 29% of households in the US saved less than $1000. This is an alarming figure, as a lack of substantial savings can prove to be detrimental in case of unforeseen expenditures. Similarly, another alarming figure is that American households hold an average of $132,529 in debt. These debts are of various types, including credit card dues, student loans, car loans, medical debt, and the big one being mortgages. Moving on, around 53% of Americans live paycheck to paycheck, making them the most vulnerable to financial difficulties. The situation is getting worse, as the survey further showed that 44% of people won’t be able to fulfill their mortgage obligations if they miss even a single paycheck. Additionally, a big proportion of US citizens have not made a long-term financial plan as well. Making situations worse is the massive burden of student loans on recent college graduates. Currently, $1.7 trillion is owed by Americans in form of student debt, which is twice more than what was owed at the beginning of the decade. This is a scary situation, as the considerable cost of college is making students not opt for it in the first place, as fresh graduates have to spend years paying back their dues, along with managing new household expenditures.


In this article, we looked at the major areas of spending of the US population and we then looked at some considerable issues impacting American spending. Even though the US economy has been growing for the past decades, if considerable attention is not given to the rising debt levels in the economy, Americans could continue down the road of deep financial trouble

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