Where Does Your Cash Go?

The Credit Loan blog had a very interesting infographic chronicling how the average consumer spend their paycheck. The infographic was compiled from a survey conducted by the Department of Labor.

We like to cry broke, but according to the information, the average family has an income of $62,857 before taxes but spends about $49,067.  Not surprisingly, housing costs account for almost 35% of the total amount that the average family spends.  Considering that about 66% of households are homeowners, if you sell your home and begin renting, you might realize some savings in this area.

The next two largest areas of spending, transportation (almost 16%) and food (almost 13%) are necessary, but again, a diligent person can save money in these areas.  You have to eat and you have to get to work, but if you hold on to an old car longer and implement some of my methods of saving money on gasoline, you might end up with more cash in your pocket.

We all have to eat, but eating less meat, packing your lunch and eating out less frequently can add up to significant savings at the end of the year. Also, buying in bulk and growing a summer garden can also help.

If you have a moment, take a good look at this infographic.  It was eye opening for me. Click to enlarge.

where paycheck goes infographcic - Where Does Your Cash Go?

This post was included in ther Festival of Frugality at Living Richly On A Budget.

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14 thoughts on “Where Does Your Cash Go?

  • Hi Sandy, I’ve seen that spending graphic before and it backed up what I suspected – people are spending way too much on housing! If you add in rented dwellings and mortgage interest, the total is 47.58% of yearly income. This leaves very little ability to accrue an emergency fund, pay down debt, or save a meaningful amount. I know too many people who are clipping coupons and cutting out lattes when the real problem is they could never afford their mortgage. Even counting utilities, my husband and I are spending less than 20% on our apartment.

    I also feel your pain about student loans! I will pay them off this year, but I graduated in 1996. I haven’t even worked in the field since 2001.

  • Hi Sandy, I’ve seen that spending graphic before and it backed up what I suspected – people are spending way too much on housing! If you add in rented dwellings and mortgage interest, the total is 47.58% of yearly income. This leaves very little ability to accrue an emergency fund, pay down debt, or save a meaningful amount. I know too many people who are clipping coupons and cutting out lattes when the real problem is they could never afford their mortgage. Even counting utilities, my husband and I are spending less than 20% on our apartment.

    I also feel your pain about student loans! I will pay them off this year, but I graduated in 1996. I haven’t even worked in the field since 2001.

  • I thought this chart was amazing too. If you just look at my housing costs (and exclude my mom’s) I fall below the average, but I have a higher than average income and I can’t tell you how many times I’ve counted my blessings about making that decision.

    A lot of people I know are house poor. Even high income earners cry the blues about not having extra money for stuff because the bulk of their pay goes into housing and maintaining the house.

  • I thought this chart was amazing too. If you just look at my housing costs (and exclude my mom’s) I fall below the average, but I have a higher than average income and I can’t tell you how many times I’ve counted my blessings about making that decision.

    A lot of people I know are house poor. Even high income earners cry the blues about not having extra money for stuff because the bulk of their pay goes into housing and maintaining the house.

  • I’d definitely agree that housing is the biggest expense for anyone’s budget. The next largest after that is probably the automobile expense – the car, insurance, gas, repairs. It’s actually the reason why most individuals find themselves over-budget. The expenses are unexpected and not planned for.

    If you plan for an unexpected expense (for anything really), your life will be all around more joyous and carefree. Believe me.

    • Housing is very expensive. It’s no wonder that many poor and immigrant people cram a lot of people into one apartment – to share the cost.

  • I’d definitely agree that housing is the biggest expense for anyone’s budget. The next largest after that is probably the automobile expense – the car, insurance, gas, repairs. It’s actually the reason why most individuals find themselves over-budget. The expenses are unexpected and not planned for.

    If you plan for an unexpected expense (for anything really), your life will be all around more joyous and carefree. Believe me.

  • I love charts and graphs. I’ll have to check this one out in detail. I know that for me my rent and utilities hog up a bunch of my income. But my transportation is quite a bit less; my husband and I share one vehicle and I ride my bike for short errands.

    • Just by riding your boke you’re saving money right away. Gas prices are skyrocketing so every mile that you bike is money in your pocket.

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