Technology

How Different Income Groups Spend Money

When you don’t make much money, your focus is on housing, food, and important things like staying alive. However, as income increases and you can more easily cover living expenses, the extra cash goes elsewhere.

I remember being a poor graduate student, and a friend a couple years ahead of me had been working a six-figure job already. My spending radar was on two-dollar taco night at Rubio’s at the time. So any extra spending money was foreign to me.

I asked, “What do you do with that?”

He replied, “You find ways to spend it.”

But on what? Here’s what people spend their money on in a year, grouped by income level. The numbers are based on estimates from the 2016 Consumer Expenditure Survey, which the Bureau of Labor Statistics runs annually.

Overall Spending

Here’s how different income groups spend their money each in a year. Reading up and down, you get percentage breakdowns, and reading across you get average annual spending.

INCOME GROUP

More than $200k

$100k to

$150k to

AVERAGE ANNUAL SPENDING

$70k to

Less than $15k

$40k to

$50k to

$15k to

$30k to

Percentage of average income

Average dollar amount spent

Housing

Food and Beverage

Transportation

Health Care

Entertainment

Apparel and Services

Education

Personal Insurance Pensions

Cash Contributions

Other

$24k

$32k

$40k

$44k

$52k

$65k

$84k

$110k

$159k

AVERAGE TOTAL SPENDING PER YEAR FOR EACH INCOME GROUP

AVERAGE ANNUAL SPENDING

Percentage of average income

Average dollar amount spent

More than $200k

$100k to

$150k to

$70k to

Less than $15k

$30k to

$40k to

$15k to

$50k to

Housing

Food and Beverage

Transportation

Health Care

Entertainment

Apparel and Services

Education

Personal Insurance Pensions

Cash Contributions

Other

$24k

$32k

$40k

$44k

$52k

$65k

$84k

$110k

$159k

AVERAGE SPENDING FOR EACH INCOME GROUP

 
Notice how the averages for total spending for the lower income groups are greater than the upper limits of the income levels? On average, people in these groups spend more money than they make.

Let’s look closer at each of the larger spending categories.

Housing

Buying a house made me feel all grown up suddenly. I expected a similar, sudden jump here. That’s not the case. The growth is pretty steady for spending related to owning a house. As expected, rent spending goes down with income.

INCOME GROUPS

Less

than

$15k

$15k

to

$30k

to

$40k

to

$50k

to

$70k

to

$100k

to

$150k

to

More

than

$200k

Owning

One square equals $100.

As expected, people with more income spend more on home ownership…

$20,700

…and less on renting.

Renting

$4,700

INCOME GROUPS

More than $200k

$100k to

$150k to

$70k to

Less than $15k

$15k to

$30k to

$40k to

$50k to

Owning

One square equals $100.

As expected, people with more income spend more on home ownership and less on renting. With more property comes higher costs to run and maintain the household.

Renting

Utilities

Household Operations

Household Furnishings

Housekeeping Supplies

INCOME GROUPS

Less

than

$15k

$15k

to

$30k

to

$40k

to

$50k

to

$70k

to

$100k

to

$150k

to

More

than

$200k

Utilities

With more property comes higher costs to run and maintain the household.

$6,500

Household Operations

$4,800

Household Furnishings

$5,400

Housekeeping Supplies

$1,100

Food and Beverages

More people spend more on food at home than food away from home, but once you reach the second to highest income level, spending on food away from home takes the lead.

INCOME GROUPS

Less

than

$15k

$15k

to

$30k

to

$40k

to

$50k

to

$70k

to

$100k

to

$150k

to

More

than

$200k

Food at Home

One square equals $100.

$7,100

Food Away From Home

Most people spend more on food at home, but by the $150,000 to $200,000 group, more is spent on food away away from home.

$8,900

Alcoholic Beverages

$1,600

INCOME GROUPS

More than $200k

$100k to

$150k to

$70k to

Less than $15k

$15k to

$30k to

$40k to

$50k to

Food at Home

One square equals $100.

Food Away From Home

Most people spend more on food at home, but by the $150,000 to $200,000 group, more is spent on food away away from home.

Alcoholic Beverages

Transportation

The increasing pattern continues with vehicle purchases and maintenance. Spending on travel spikes.

INCOME GROUPS

Less

than

$15k

$15k

to

$30k

to

$40k

to

$50k

to

$70k

to

$100k

to

$150k

to

More

than

$200k

Vehicle Purchases

One square equals $100.

This is for net outlay, which is purchase price minus trade-in value.

$7,500

Gasoline and Motor Oil

$2,900

Public and Other Transportation

This category includes airlines, and I’m guessing the extra spending comes from travel.

$2,900

INCOME GROUPS

More than $200k

$100k to

$150k to

$70k to

Less than $15k

$15k to

$30k to

$40k to

$50k to

Vehicle Purchases

One square equals $100.

Gasoline and Motor Oil

Public and Other Transportation

This category includes airlines, and I’m guessing the extra spending comes from travel.

Health Care

At this point, you’re probably familiar with the increased spending in each category as you increase the income.

INCOME GROUPS

Less

than

$15k

$15k

to

$30k

to

$40k

to

$50k

to

$70k

to

$100k

to

$150k

to

More

than

$200k

Health Insurance

One square equals $100.

$6,600

Medical Services

$1,900

Drugs and Medical Supplies

$1,100

INCOME GROUPS

More than $200k

$100k to

$150k to

$70k to

Less than $15k

$15k to

$30k to

$40k to

$50k to

Health Insurance

One square equals $100.

Medical Services

Drugs and Medical Supplies

Personal Insurance and Pensions

Here is the most dramatic difference by far. People with higher incomes have a lot more money to save after they pay for living expenses, percentage-wise and in average dollars.

INCOME GROUPS

Less

than

$15k

$15k

to

$30k

to

$40k

to

$50k

to

$70k

to

$100k

to

$150k

to

More

than

$200k

Pensions and Social Security

One square equals $100.

After living expenses are covered, people save for retirement, and of course, those with higher incomes can afford to save much more. Percentage-wise, this is the biggest spending difference by far between the low- and high-income groups.

$29,800

Life and Other Personal Insurance

$1,200

INCOME GROUPS

More than $200k

$100k to

$150k to

$70k to

Less than $15k

$15k to

$30k to

$40k to

$50k to

Pensions and Social Security

One square equals $100.

After living expenses are covered, people save for retirement, and of course, those with higher incomes can afford to save much more. Percentage-wise, this is the biggest spending difference by far between the low- and high-income groups.

Life and Other Personal Insurance

Notes

  • The data comes from the Consumer Expenditure Survey, which is run by the Bureau of Labor Statistics. They offer a number of aggregated cross-sections. You can also download the microdata, but it’s not weighted for all states yet.
  • I made these charts in R with a variation of this unit chart tutorial. I edited in Illustrator. Mostly though, this was an excuse to figure out how to use ai2html the right way with my site setup.

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