Consider these 4 spending categories
According to the most recent data available, the median household income in the United States was $55,775. The median national income takes into account all individuals who earned income in the United States. Some earners pull in significantly larger salaries, while many families exist on considerably less than the median household income. Figuring out where you fall, however, isn’t as important as figuring out whether or not your family is spending more than the average household. We’ve compiled some of the most expensive categories of expenditures that families have. So, what is the average household budget and are you spending more than the average family?
Housing
According to data collected by the Census Bureau, the average American household spends about $11,000 a year on housing, whether they are renting or they own a home. It is important to consider that this number considers all the individuals in the United States and utilizes the average spend. For people living in high cost of living areas, such as New York, Boston, and San Francisco, the number is significantly higher. For those living in Michigan, the amount falls closer to the national average. Homeowners, because of taxes and other housing-related expenses, will find they spend more, depending on the size of their mortgage and their current interest rate.
Grocery Budgets
According to the USDA, the average family of four can expect to spend between $146 - $283 per week on groceries. These numbers represent four separate plans, ranging from a thrift plan to a more liberal plan where pre-cut convenience produce items and high-end meats are purchased. If the numbers seem high, you aren’t alone. Most agree that the cost of food is becoming more expensive, making it more difficult to eat healthy, especially as processed foods are consistently the lowest priced items in the store.
With that being said, there are plenty of ways to keep your grocery budget and average household budget under the national average if you have the time and energy to invest in money-saving measures. Coupon aficionados can save more than 50% on their grocery bills by utilizing manufacturer coupons and in-store sales. Fresh produce rarely has coupons attached, but watching the weekly sales can help you save big. The same is true for meats. Coupons can be used to fill in pasta, cereal, and other food staples.
Childcare
Childcare is a staggering cost in the average household budget. According to a recent study conducted by Care.com, childcare for an average 4-year-old is more expensive, pound for pound, than in-state tuition for college. Parents can expect to spend, on average, $196 per week on daycare centers. After school care services average out to $14 per hour, according to the same study. If a nanny is more your speed, childcare costs can run nearly $2,400 each month.
If you have children and are paying less than the listed amounts, you are in good shape, but don’t expect the price of childcare to stay stagnant. Experts anticipate the cost of childcare to rise each year. As in-home sitters and childcare centers require more insurance and training, the cost of such qualifications will be passed onto families. In larger cities where there are more dual-income families, the competition for spots in childcare facilities will drive up the cost. New Yorkers, for example, pay an average of $1,354 per month for an infant in a daycare facility.
Cutting the Fat
While the general cost of living might seem high, especially for those making less than the national average income, there are ways to cut back and lower your average household budget. As noted, utilizing coupons can help to lower food budgets. Utilizing childcare from friends and family can also help you save money each month. Mothers who work part-time might consider a nanny share situation with other families in similar situations, reducing the cost of private childcare and paying only for the days that you need someone to watch your child. Experts also suggest reducing erroneous expenditures and keeping a close eye on your budget, as well as paying down debt as quickly as possible to free up liquid cash for investment and savings purposes.
Equal Housing Lender