How Does Your Family Spend Money?

What is Middle Class Income?

Happy Monday everyone! As today is my birthday I really did not want to bore everyone with verbose prose on some sort of personal finance topic. So, what better way to communicate than through an infographic? A lot has been said about the middle class and where they stand (how they spend money), especially in light of the economic headwinds we’ve faced over the last five years. I like this infographic because it shows how the “average” middle class American family spends its money. Although I was not surprised by the following statistics, they did grab my attention:

  • Only 3.2% of income is saved for retirement
  • The middle class has shrunk by 11% since 1970
  • The savings rate is abysmally low at 3.5%
  • Student loan debt continues to increase



What are your thoughts? Did anything stick out to you, or was it of no surprise? How does your family spend money?

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About the author:

I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. You can connect via Twitter / Facebook.

66 comments on “How Does Your Family Spend Money?

  1. HAPPY BIRTHDAY!!! Interesting infographic. I guess the thing that stands out for me the most is that a) middle class people spend 0.7% of their income on shoes b) that the my income and house size fit right in line with “middle class” and c) the average savings is only $4,000 a year. I think that savings rate says a lot about our priorities in this country.
    Greg@ClubThrifty recently posted..6 Tips for Making Home Ownership AttainableMy Profile

  2. Happy Birthday, John! I have to agree with Greg, the healthcare numbers were what struck me the most too. As a family of six, we work hard to keep healthcare costs low by using preventative measures and naturopathic medicines. It would really put a crunch in our budget to spend over 6% of our income on healthcare costs.

    Also, I’m assuming that most of the 11% that left middle class went down instead of up, given the increase in public assistance recipients? Any idea on that?

    Thanks for the informative post, and have a great day!
    Laurie recently posted..Motivation: Learning From OthersMy Profile

    • Thanks Laurie! That number stuck out to me as well. We do as much preventative measures that we can and we’re relatively healthy, so thankfully we’re nowhere near that number.

      I think your assumption is probably pretty accurate. I think we’ve seen a growing divide between the have’s and have not’s, so it would not surprise.

    • You bring up a great point! My Dad is always saying how people ate out much less when he was growing up. It does seem to be a high number to me and one that I am certain we’re nowhere near.

      • So very true. When I was growing up in the 60′s & 70′s I can probably count on one hand the times I ate at a restaurant with my parents. I never had takeaway chinese food or a pizza until I was a teenager. Now it seems to be a part of everyday life.

        • What is kind of sad is that not many are seeing the correlation to restaurant spending and the state of our health. We are literally eating ourselves sick! Time to refocus and bring some of that food money back into our wallets and focus on our health.
          Julie recently posted..Insert Fun Here….My Profile

    • Lol! I know Joe, but what can I say I am a workaholic. ;) Responding to comments is all I am planning on doing today. Well that and pretty much nothing else.

    • Thanks Grayson. I am planning on just responding to comments, writing a post and getting away from the computer. While not really surprising, it was an eye opening infographic.

  3. Happy Birthday!! If I were closer, I’d take you out for the early bird senior special at Denny’s. What sticks out to me in this infographic is how the savings rate when up during the financial meltdown, but now that the economy is somewhat better, it is back down again. Nobody learned their lessons, apparently. The amount spend on vacations and pets compared to saving is also a bit surprising. We are certainly an instant gratification society.
    Kim@Eyesonthedollar recently posted..How to Retire in Ten Years, Regardless of Your AgeMy Profile

    • Thanks Kim! I mentioned your gesture to Mrs. Frugal Rules and it gave her a good laugh. :) Of course, she has a few more years than I do to hit the big 4-0.

      You bring up a great point Kim…no one learned their lesson, sadly. Yes, we do like our instant gratification.

  4. Happy Birthday!

    Definitely enjoyed the infographic. Looks like i have a below average size home : ( Haha just kidding it really doesn’t matter, but it’s interesting to see how the data adds up. There’s a wealth of data in that infographic.

    Anyway, hope you have a great bday and I hope you took the day off from commenting and tweeting!
    DC @ Young Adult Money recently posted..5 Ways to Invest in YourselfMy Profile

    • Thanks DC! Yes, I am taking (sort of) the day off. I am just responding to my comments and writing a post then I plan on unplugging for the rest of the day.

      Our house is below “average” as well, but we like it and it comes down to being content I think.

    • Yes it is Brian. It was not really surprising to me though. Great point on cars & guess…11% is spent on that. Thankfully, we’re well below that.

  5. Happy birthday (again)!!!

    The big part that stuck out to me was the amount we spend on housing and vehicles. Between the mortgage, utilities, TV/cable, furniture, car payments, gas, and car repairs, the middle class family spends nearly 55% of their income on that. That’s way too much. Imagine if people lived in smaller homes, didn’t commute 30/miles each way to work, and didn’t carry debt on their cars.

    I think things would look a little different….
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    • Thanks Jason!

      Great point! I could not agree more, way too much is being spent by most on those areas and it is scary to see those numbers all summed up. I think it is a point to how we really have become in society as that we generally want more and bigger things…i.e. lack of contentment. I agree, things would look a little different.

  6. Happy Birthday John,
    I always like the infographics. It’s no surprise though that housing is tops in % and that % percentage saved has been on the decline since 2009. I agree with Jason, when you add it all up it’s a staggering percentage of money that we spend for the roof on our heads, transportation and utilities. Have a great day!
    Canadianbudgetbinder recently posted..The Pros and Cons of Homeschooling In Canada Part 2 of 2My Profile

    • Thanks MMD!

      I would agree on the mortgage as well. We are somewhere in the low 20′s ourselves and am thankful we kept it to that. Sure, we’d like a bigger home, but we have other priorities than a bigger house.

    • Thanks Catherine!

      You bring up a great point, one that I was wondering myself. I wonder if it’s skewed at all by government programs at all. Regardless, I think it’ll be a number that will be going up in the future if nothing substantive is done.

  7. Happy birthday (again) John! Wow 3.2% savings rate, and that’s the average… Around me I have a lot of people who seem to be expecting their parents to cover for them. A friend got about 50% deposit on a house by her parents. Another one is basically counting how much he will get when his parents die. And they don’t consider how they would do the same for their kids…
    Pauline recently posted..What You Need to Know When Buying a CarMy Profile

  8. Great infographic! I have to agree with the comments above about savings rates. It is interesting that you see the savings rates through the recession of 2008/2009 spike up to 8%. How soon do we forget the past. Only two years later and the rate is back down to 3.5%. Certainly shows where the priorities are. Almost $1,000 spent annually on TV’s while only $4,000 is saved. It would be interesting to see this contrasted against Canadian and European savings/spending rates. Not sure what the results would be but I am sure it would be a good read.
    Jeremy @ CreditSpark recently posted..Good Credit Is SexyMy Profile

    • Thanks Jeremy! I think it goes to show how easily we forget the past and how uninformed we are in general. While the numbers are not surprising, they do show how little we emphasize being prepared for the future.

    • That really can be helpful to not have loans to pay off. I would tend to agree on the vacation as well. We take a family of five on one for a fraction of that cost. Other than our honeymoon the only other time we spent more than $3000 was on a cruise we went on last year.

    • I wish I were as hopeful as you. :) I think the saving rate, while not surprising, is still way too low for the “average” family. I think it goes to show how quick many of us forget.

    • Thanks Tonya! I would not be so quick to think you don’t “qualify”. I am not certain what they’re considering in this. If it’s a family of four, then it’s comparing apples to oranges. That said you can use numbers to say almost anything you want.

  9. Happy Belated Birthday John! Very interesting infographs and the cost that stood out to me is the rising cost of college education. Too many grads exit school and suffer from lack of employment/under employment and have to shoulder such large loans. I’m so glad I’m past done with my student loans which were nowhere near the amounts shown.
    K.K. @ Living Debt Free Rocks! recently posted..All Yuh Mad! Trinidad MomentsMy Profile

    • Thanks K.K.! That’s a great point about student loans. It is rising and many are graduating with tens of thousands in student loan debt. I am so thankful to be past that myself.

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