How Does Your Family Spend Money?

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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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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. I'm also a freelance writer, and regularly contribute to GoBankingRates, Investopedia, Lending Tree and more.


  • 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.

  • Laurie says:

    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!

    • John says:

      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.

  • That’s a lot to be spending on food away from home. I’d love to compare these figures with those of 25 years ago to see how lifestyles have changed! Have a great day John.

    • John says:

      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.

      • kathryn says:

        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.

        • Julie says:

          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.

  • AverageJoe says:

    You should have told the truth: as today is my birthday, I’m spending a day away from the blog and let someone else carry most of the work! That’s what I’d do! Hope you’re somewhere with your feet up, man. Happy flippin’ birthday.

    • John says:

      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.

  • Wow, very interesting. We don’t smoke, and live in Canada so that reduces the tabacco health care side of it substantially . We also save a lot more than 3.5%; I’d say somewhere between 13-15% of our combined income. Otherwise, this looks fairly accurate for us.

  • Happy Birthday John. I hope you enjoy the day, even though it is a Monday. Great infographic. It is a sad one, much like mine is that I posted today. Enjoy your birthday and I hope you get a few moments away from the computer.

    • John says:

      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.

  • 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.

    • John says:

      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.

  • 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!

    • John says:

      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.

  • Brian says:

    Great infographic! The savings rate is quite scary… And that’s quite a bit of money on cars and gas!

    • John says:

      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.

  • Jason says:

    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….

    • John says:

      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.

  • 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!

  • Happy Birthday!

    Those numbers are about what I would expect. Median income has little changed over the years, so savings will likely go down as inflation goes up. 31% seems very high to me for mortgage! Mine is more like 20-25%.

    • John says:

      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.

  • Catherine says:

    With all the health issues plaguing society I’m sort of surprised more isn’t spent on medication.

    Have a great birthday!!

    • John says:

      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.

  • Looks accurate, but for us, we’re weird. I’m at like 50% + on my PITI, and WAY less on groceries. Mostly, my money goes toward the house 🙂

  • Mackenzie says:

    Cool infographic!

    Happy Birthday!!!!!! Hope it’s totally awesome 🙂

  • Happy Birthday! Seems to be the day for infographics. They have become a great way to share information.

  • This was fun. Some of the percentages are pretty close to our spending, others aren’t. Some of the percentages are close but in our case represents a lot of spending! (ie, Alcohol or mortgage).

  • Pauline says:

    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…

  • These numbers sound about right, although seeing such a low savings rate really is scary. That’s so little!

  • I liked the piggy bank pie chart.

    What I don’t get is how can the bottom of the range for middle class income be the median household income? Shouldn’t it be in the middle of the range instead?

  • Justin@TheFrugalPath says:

    Happy birthday John. I’m really shocked at some of these numbers. Although I suppose I should be. 10% of your income on smokes. Imagine adding 4 years to your career to cover an addiction. That’s just nuts.

  • If my girlfriend got out of college w/ $32k of student loans it would have been a miracle… but instead it was over $80k! I’m so hoping we get them paid off this year like we are planning to! 2 to 2.5 years after she graduated 🙂

  • Happy Birthday!! This is a great infographic thank you for sharing. Enjoy your birthday make it a good one.

  • John says:

    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.

  • I’m proud to say that I don’t owe any money on college loans which I think is why I’ve been able to get ahead so much financially. However I have to disagree on spending $3000 for an average vacation. I don’t think I’ve even come close to spending that much on a vacation ever.

    • John says:

      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.

  • GoodTrader says:

    The fact that people are saving more money than it spends on vacation makes me think that there is still some hope. Despite this I think people are too optimistic about their future.

    • John says:

      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.

  • Lakita says:

    Hi John,
    These are very good statistics and nice presentation of charts.
    This is very interesting for middle income families.
    With your statistics, people will know where they stand.
    Just a thought, it really pays to be spending a lot.

  • Happy Birthday! The most depressing part of that infograph is that I don’t even “qualify” to be in the middle class. I made less than 50k last year. OMG! Sigh….

    • John says:

      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.

  • The saving rates scare me. I’m all for living today, but risking your future is something that no one should do.

  • Kay Lynn says:

    That retirement fund savings rate is awful but I was once there — for far too long! It’s hell playing catch-up and I never really will “catch up”.

  • K.K. @ Living Debt Free Rocks! says:

    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.

    • John says:

      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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