Most Americans spend the highest percentage of their income on housing, which accounts for approximately 33% of annual household expenditures. Other top spending categories include transportation (roughly 17%), food (about 13%), and personal insurance/pensions (around 12%).
Nearly half of mandatory spending in 2022 was for Social Security and other income support programs such as the Child Tax Credit, food and nutrition assistance, and federal employee benefits (figure 3). Most of the remainder paid for the two major government health programs, Medicare and Medicaid.
Housing is by far the largest expense for Americans. Monthly housing expenses in 2024 averaged $2,189, a 3% increase from 2023. Over the course of the entire year, Americans spent an average of $26,266 on housing.
The 70/20/10 rule for money is a simple budgeting guideline that splits your after-tax income into three categories: 70% for Needs (essentials like rent, groceries, bills), 20% for Savings & Investments (emergency funds, retirement), and 10% for Debt Repayment & Donations (extra debt payments or giving). It balances immediate living costs with long-term financial security, helping you cover necessities while building wealth and paying off liabilities.
The typical American household has $8,000 in their bank account, according to the latest data from the Federal Reserve's Survey of Consumer Finances. That's the median transaction account balance as of 2022, which includes savings, checking, money market, call accounts, and prepaid debit cards.
In terms of deficit reduction, the final monthly Treasury statement for FY 2025 (ending in September) showed a deficit of roughly $1.78 trillion, as compared to roughly $1.82 trillion for FY 2024.
SNAP is funded by the federal government via the Farm Bill and administered by the states, which distribute it to eligible residents. Recipients can then spend that money on food and beverages. The money cannot be spent on tobacco, alcohol, nonfood items, or in most cases, prepared foods (takeout).
Meanwhile, online shopping as well as food delivery have made it easier to indulge in treats. Indeed, Gen Z uses grocery subscriptions 133% more often than Gen X, according to a 2024 PYMNTS survey of more than 67,000 consumers across 11 countries accounting for nearly half the world's GDP.
These are products that people consider essential. They're what people buy the most. These products include beverages, food, household items, and tobacco.
The "27.39 rule" (often rounded to $27.40) is a simple financial strategy to save $10,000 in one year by consistently setting aside $27.40 every single day, making it an achievable micro-saving habit to build wealth or an emergency fund. It turns the daunting goal of saving $10,000 into a manageable daily action, emphasizing consistency over large lump sums.
A "good" monthly income varies, but generally, $4,000–$8,000/month covers a basic to comfortable lifestyle in many U.S. areas, covering needs like housing, food, and some leisure, while $10,000+/month supports a more affluent lifestyle, though costs depend heavily on your location, family size, and financial goals like saving and retirement. A common benchmark for comfortable living is replacing about 80% of your pre-retirement income.
The Pew Research Center defines the middle class as households that earn between two-thirds and double the median U.S. household income, which was $83,730 in 2024. 2 Using Pew's yardstick, middle income is made up of people who make between $55,820 and $167,460.
Around 24-42% of Americans have $0 in emergency savings, depending on the survey, with many lacking even enough to cover a small unexpected expense, while for retirement savings, figures vary, but roughly 28-40% of non-retired adults have no retirement account at all, highlighting a significant gap in financial preparedness.
Paying off significant debt generally trumps savings. You can always build up your savings once you are out of debt. First, try to address your debts, get them to a manageable place and then determine if you can adjust your budget to start building up your savings.