Households are spending a higher percentage of their budgets on housing, healthcare, and education than almost 30 years ago, according to the latest data from the Bureau of Labor Statistics. US households are also spending less on clothing, food, and transportation.
In 2020, the average American household spent about $51,800 on goods and services[1]. Housing was the biggest expense at about 40% of all household spending. Americans also spent more than 10% of their total budgets on transportation (19%), food (14%), and medical care (10%).
But it wasn’t always this way. Household spending towards housing is more than double what it was in 1993, the farthest government data goes back. Healthcare and education costs almost tripled during the same time period. And while the rising costs of all three have made headlines in recent years, price increases aren’t the only explanation for the shifts in household budgets.
