Recently a good ‘friend-in-law’ posted this interesting chart on where Americans spend their money. The chart is not just for this year, but for the past 75 years (all numbers adjusted for inflation) using a single data source.
Take a look at how amazing this chart (from howmuch.net – a cost information web site. It really causes me to reflect on our lifestyle today. How the way we live compares with 10, 20, 40, or 75 years ago. (sorry the chart is a little grainy – couldn’t find a higher-res version)
Here are a couple thoughts that came to mind when I looked at this chart …
HOUSING – Based on this data, it’s all about the house, isn’t it? Housing is not only the biggest expense item, but also the one that seems to be on a never-ending climb. I imagine that vacation homes and lake properties have also driven these numbers up. Might it be starting to plateau over the last decade, or will it surge forward over the next 10 years?
CARS – While houses are expensive, so is our spending on transportation. This area has certainly become a guilty pleasure area for me. If you look at the chart, cars account for a lot of Americans’ spending. Thankfully, they haven’t changed much over the last 30 years – even though cars are much more sophisticated.
FOOD & CLOTHING – These staples are down a lot over the period of time on the graph. I worked most of my career in the food industry and growers, processors, distributors, and retailers have become way more efficient in feeding the world. Back in the 1940s, food was the top spending item on this chart – higher than housing even. Clothing similarly, have likely benefited from global production.
HEALTH CARE – The costs of medical care have doubled, and will undoubtedly continue to rise. More people get health care than ever before and the quality of healthcare is exponentially better. While it is a big increase, it pales relative to what people spend on housing.
EDUCATION – I’m surprised by how relatively low this category is, but I suppose most of the spending for education is paid for through our taxes. Additionally, not everyone has kids that are school-aged or in college. I couldn’t find any reliable trend data that showed government (local, state, federal) spending on education is going up or down.
RECREATION, ENTERTAINMENT, PERSONAL CARE, READING, ALCOHOL & TOBACCO – These spending categories, which all are indulgences of one sort or another, have really leveled off in it’s growth over the last couple decades. I expected that they would be growing as fast as ever, but maybe we have reached the ceiling in terms of our desire for entertainment and indulgences. 🙂
In closing, when I look at the chart overall, I am still astonished by the cost and growth rate in what we spend on housing. Here is another chart (from AEI.org that goes back to the 1970s) and shows how crazy the growth in housing costs has been relative to the number of people living in each household …
How do you assess your spending against these benchmarks?
Image Credit: Pixabay