Consumer spending makes up a large percentage of the United States economy. We all have bills to pay and mouths to feed. But where do Americans spend their money?
Take a look at this chart below to see a breakdown of how Americans spent their money in the last 75 years. You can click on the chart to make it larger.
This chart is from Unprecedented Spending Trends in America, in One Chart via the cost information website Howmuch.net. Notice that the chart breaks spending into 12 unique categories: reading, alcohol, tobacco, education, personal care, miscellaneous, recreation & entertainment, healthcare, clothing, food, transportation and housing. Each category is further broken down into spending by year, from 1941 to 2014, and each category is given a unique color. The data were collected from the Bureau of Labor Statistics and measures median spending of all Americans; prices were adjusted for inflation.
Unsurprisingly, housing expenses have almost always been the largest area of spending in America for over 70 years. The only exception is 1941, when spending on food averaged $8311, whereas spending on housing came to $7537. However, in 1941 the government included alcohol in the food spending category, which inflates the food spending data for that year. In the other years, alcohol was given its own category. In every other year measured, spending on housing outpaced every other category.
Another interesting trend is the downward slope of spending on clothing. Americans spent the most on clothing in 1961 for an average of $4157. In every year measured since 1961, spending on clothing fell, even when accounting for inflation.
At the same time, Americans began spending more on education, transportation and healthcare. Spending on education has increased far more than any other category, jumping from $242 in 1941 to $1236 in 2014. Education spending increased at a particularly fast rate between 1984 and 1994 and onward. While spending on healthcare increased between 1941 and 2014, overall spending dipped between 1973 and 1984, but then began rising rapidly thereafter.
Between 1941 and 2014 Americans spent money on most of the same things, with a few changes. Housing has persisted as a large area of spending for Americans, as has the food category. However, spending on food and clothing has fallen when adjusting for inflation while spending on education and healthcare has risen quickly.
Photo Credit: Steve Snodgrass; Source: HowMuch.net (reprinted with permission)
Very interesting article. I didn’t realize how much money people spend on entertainment. Thanks!
Woah these are some neat trends in long-term financial changes. Thanks for posting Raul!
Very interesting post to start with..its important to remember how to save before retirement.
It’s good to see we’re spending more on education. I think it’s safe to assume that the quality of that education has also increased overtime.
I’m not so sure, Ken. I think the increase in education spending is due to the ridiculous increase in college tuitions during the past 30 years — and that is directly attributable to the expansion of government student loans. I also question the increase in quality over that timeframe.
The one thing I see missing is all of the various taxes ( Federal, State, local, and Social Security) we pay. Otherwise very interesting data.