How Americans' Spending Habits Have Changed Over a Decade

New data shows how much people have spent each year on health care, housing, transportation, education and retirement since 2004.

(AP/Richard Vogel)
Where consumers end up spending their money each year fluctuates for a number of reasons.

It isn’t solely a matter of personal preferences. Costs for goods and services may change, and demographic shifts further influence spending habits.

The U.S. Department of Labor has published updated data estimating consumer spending for several different expenses. Here’s a summary of a few key trends for larger areas of spending.

Health-Care Spending

Americans have been spending more and more of their money on health expenses, and the latest federal data suggests a major hike in spending took place last year. Consumer units (a definition similar to households) spent an average of nearly $4,300 last year, up 16 percent from 2013 after adjusting for inflation.

The most obvious explanation for this is the Affordable Care Act mandate requiring most people to obtain health insurance, which went into effect last year. One major caveat to note here is that the Labor Department also introduced a change to its methodology. To improve accuracy, the agency started calculating how much consumers are paying each quarter rather than relying on survey respondents to do so from their insurance bills, affecting comparability to prior years.

This chart shows average health spending per consumer unit, including insurance, medical services, supplies and drugs:


Homeownership, Rental Spending

Housing costs represent another major area of spending. One trend highlighted in the data illustrates the result of more Americans opting to rent rather than buy houses. In many markets, the housing stock hasn’t met the demand for rentals, driving up prices. Meanwhile, costs for homeowners have continued along a steady decline since 2007.

Note that spending categories shown above include costs like interest on mortgages, property taxes, insurance and repairs. They don’t include utilities, appliances and furniture or equipment-related expenses.  

Transportation Spending

Last year, Americans spent an average of $9,073 on all expenses related to transportation. This figure has ticked up a bit after declining during the recession, but it’s still down from pre-recession levels after adjusting for inflation.

Breaking down the data further shows how spending for individual types of transportation expenses have fluctuated. 


Education Spending

College tuition prices have climbed significantly over the last 40 years. However, the Labor Department data on education spending, which also includes expenses for elementary and high schools, does not depict a steady upward curve. Part of this is explained by the fact that households with no education expenses are included in the averages (and most households don't have children in college). Research by the College Board also notes that increases in what students actually pay to attend college aren’t as high as increases in published tuition prices after grants, tax benefits and other aid are taken into consideration.

This chart shows changes in spending for married couples with children (regardless of age):


Retirement Spending

Finally, retirement-related and life insurance contributions account for another large area of consumer spending. Social Security contributions and payments made to employee pension systems account for the vast majority of spending in this category. Over the past 10 years, real spending in this area has dipped just over 5 percent.


Data Notes

The Consumer Expenditure Survey estimates average annual expenses per consumer unit, a definition similar to a household or family. Not all consumer units purchase items in a given category. For this reason, averages for categories such as vehicle purchases and education are significantly higher for only consumer units that made purchases. Also, some spending may result from non-work-related income, such as gifts.

Refer to the Labor Department website for definitions describing each expenditure category. See our prior report on consumer spending for data for larger metro areas.

Special Projects
Sponsored Stories
GHD identified four themes critical for municipalities to address to reach net-zero by 2050. Will you be ready?
As more state and local jurisdictions have placed a priority on creating sustainable and resilient communities, many have set strong targets to reduce the energy use and greenhouse gases (GHGs) associated with commercial and residential buildings.
As more people get vaccinated and states begin to roll back some of the restrictions put in place due to the COVID-19 pandemic — schools, agencies and workplaces are working on a plan on how to safely return to normal.
The solutions will be a permanent part of government even after the pandemic is over.
See simple ways agencies can improve the citizen engagement experience and make online work environments safer without busting the budget.
Whether your agency is already a well-oiled DevOps machine, or whether you’re just in the beginning stages of adopting a new software development methodology, one thing is certain: The security of your product is a top-of-mind concern.
The World Economic Forum predicts that by 2022, over half of the workforce will require significant reskilling or upskilling to do their jobs—and this data was published prior to the pandemic.
Part math problem and part unrealized social impact, recycling is at a tipping point. While there are critical system improvements to be made, in the end, success depends on millions of small decisions and actions by people.
Government legal professionals are finding Lexis+ Litigation Analytics from LexisNexis valuable for understanding a judge’s behavior and courtroom trends, knowing other attorneys’ track records, and ensuring success in civil litigation cases.