recent survey shows that housing accounts for the maximum expense for Americans ranging from 30-35% of the monthly budget.
The career jump
We start earning at a very young age and thanks to part-time jobs, freelance etc. it fills the need to use it as pocket money. But the biggest jump occurs when we turn 25 and start getting a decent lump of dollars through a career. We tend to spend more on everything we wished to buy and there’s no urge to save at this age.
Age defines expenses!
Does age define how we spend? Yes, it does. A recent survey by the CNN shows that the there is a defined pattern of expenses for the different age group of people. The above graph shows the monthly budget by age with reference to the survey by U.S. Bureau of Labor Statistics’ 2015 Consumer Expenditure. Let us see in detail where all the money is spent for different age groups and what the monthly budget is at the different age.
This is the blooming age where we are free of responsibilities and can afford to spend on things that we love. Young adults at this age are relatively thrifty; know how to control their expenses and thus spend less than what their elders spend on most of the things. Young adults spend most of the money on education. Average monthly expense report: Housing: $944 Transportation: $527 Food: $408 Healthcare: $82 Education: $214 Entertainment: $113 Total(Average monthly family budget): $2733
25 to 34
This age group is termed as millennials where people start getting settled in jobs and have a stable career. People in this age group spend money in a sensible way, either to clear off debts or start saving money. Average monthly expense report: Housing: $1525 Transportation: $815 Food: $553 Healthcare: $231 Education: $94 Entertainment: $216 Total(Average monthly family budget): $4339
35 to 44
This phase is termed as adulthood where people start having family and settle with kids. With the increase in the number of persons in the family, the expenses are expected to shoot up as well. In short, in this phase, people are struck with the highest food and housing costs with marriage and/or mortgage expenses. Average monthly expense report: Housing: $1850 Transportation: $912 Food: $737 Healthcare: $323 Education: $98 Entertainment: $266 Total(Average monthly family budget): $5445
45 to 54
This age group is termed as generation-X when your kids start growing to teens and the expenses are at peak. When your kids start driving, your transportation costs are also expected to rise. As kids head to college, education costs also contribute to major part of monthly expenses. Average monthly expense report: Housing: $1763 Transportation: $982 Food: $701 Healthcare: $389 Education: $222 Entertainment: $276 Total(Average monthly family budget): $5813
55 to 65
This age group is called boomer age where the income drops off and the expenses of food and transportation also set low. But there’s a rise in health care costs with age. Average monthly expense report: Housing: $1516 Transportation: $835 Food: $583 Healthcare: $426 Education: $97 Entertainment: $277 Total(Average monthly family budget): $4898
65 & above
This age group is called the silent generation or the golden age. In general, older Americans tend to cut down all the expenses in almost all categories with an exception in healthcare. As we age, the health care costs contribute to the major expenses with more dependency on medical care and prescribed drugs. Average monthly expense report: Housing: $1294 Transportation: $571 Food: $459 Healthcare: $480 Education: $22 Entertainment: $205 Total (Average monthly family budget): $3722
The effect of housing and healthcare costs with age!
With every passing age, the major difference in monthly expense depends on two major categories: housing and healthcare. The older we get, the more is the health care expenses.
Sometimes things fall out of place and at unexpected times when you least expect any expense, you encounter a big expense report. Once you start earning, cultivate the habit of saving some money as emergency fund apart from your regular savings. Handling your money totally depends on how you take care of your expenses. It doesn’t matter what age group you fall into, planning ahead to reach your financial goals will be a wise move.