Housing is consistently the largest expense for American households, typically accounting for over 30% of total annual expenditures, which includes rent or mortgage payments, property taxes, and insurance. In 2024, average monthly housing costs were $2,189. Following housing, transportation (17%) and food (12-13%) are the next largest expenses.
What Do Americans Spend the Most on Each Year?
Major expenditure categories are defense, healthcare, and Social Security; income and payroll taxes are the primary revenue sources. During FY2022, the federal government spent $6.3 trillion.
The 10 largest budget functions make up 97 percent of federal spending
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.
The general public services category was the largest spending item, taking up 25% of total expenditure. This was followed by education (20%), social protection (15%) and health (12%). A closer inspection of general public services reveals public debt transactions as the significant cost driver.
Americans say these are the top 5 things they waste the most...
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).
Consumer Spending
They're what people buy the most. These products include beverages, food, household items, and tobacco. Other consumer goods that people buy regularly include cleaning products, personal hygiene items, and clothing.
Middle-income earners typically retain 20%–25%. Lower-income households often have just 10%–15% remaining.
1837: Andrew Jackson
This resulted in a huge government surplus of funds. (In 1835, the $17.9 million budget surplus was greater than the total government expenses for that year.) By January of 1835, for the first and only time, all of the government's interest-bearing debt was paid off.
Housing. Housing is the largest expense for people across every demographic, taking up an average 33% of monthly household spending from 2021 to 2023.
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.
Today, consumer spending represents 68% of U.S. GDP, with much of this used for housing, transportation, and healthcare costs. More than ever, Americans are using debt and credit cards to fund these purchases. In the second half of 2024, household debt hit a record $17.9 trillion.