Average Monthly Expenses by Household Size

There’s no doubt the finances in your household are unique. Your expenses are influenced by the specific details of your family makeup, including size, where you live, the ages of your dependents and more.

When it comes to finances, however, many of us have similar habits, and looking at how your spending compares to others can be enlightening. For example, the comparison can help illuminate areas where you’re overspending or show you how other families are dealing with economic pressures.

To learn about the Average American’s spending habits, a great place to look is the Consumer Expenditure Survey (CE). This annual survey from the Bureau of Labor Statistics (BLS) can give you insights into what the average American family spends on housing, clothes, travel and more. We’ll break the data down here.

Average Monthly Expenses by Household Size

One of the biggest predictors of your full list of monthly expenses is the size of your household. According to the latest data from the BLS (2023) here’s a look at what different-sized families spend each month on a variety of categories, including:

• Housing (rent/mortgage plus utilities)
• Food
• Appliances
• Furniture
• Clothes
• Car purchases, rental, and repairs
• Transportation
• Insurance
• Healthcare
• Education
• Travel
• Entertainment
• Alcohol and tobacco

Average Monthly Expenses for One Person

Like other groups, people who are living solo likely saw their spending creep upward in 2023.

The average monthly expenses were $6,440, up 5.9% from 2022. That translates into an increase of $359 per month. The biggest expense? Housing, which accounted for roughly 30% to 36% of spending.

The upward spending trend is not new. From 2021 to 2022, members of this group saw their expenses grow by a massive 9%.

Average Monthly Expenses for a Household of Two

You might be surprised to know that households of two spend almost the same amount as one-person households. When you consider that two-person households don’t have twice the rent or utilities, it starts to make sense.

In 2023, the average expenses for a two-person household added up to $78,548, or $6,546 a month. For these households, food was the highest expense after housing. Between groceries and dining out, the average food spending was $800 a month.

Average Monthly Expenses for a Family of Three

The narrative starts to look a little different for households of three. Around 60% of these households are families with a person under 18 living in the home.

For households of three, annual expenses jump up to $89,189, which comes out to $7,432 a month. That’s $886 per month more than households of two.

If you’re in this group, transportation is likely one of your biggest costs after your rent or mortgage. In 2023, the average transportation spending for households of three was $1,369 a month.

Average Monthly Expenses for a Family of Four

The average four-person household in the U.S. has at least two income earners and one or two children under 18.

For this group, the average spending is $103,643 a year, or a whopping $8,637 a month. Like families of three, transportation is the highest cost after housing, with the average monthly cost at $1,576.

Average Monthly Expenses for a Family of Five or More

Surprisingly, households of five have a history of spending a little less than four-person households.

For 2023, their average expenses were $100,151, or $8,346 a month. The most common makeup for these households is to have two income-earners and three children under 18. Their biggest expenses? Housing, followed by transportation and then food.

Average Monthly Expenses by Age

Your average spending will be impacted by the different stages of life you go through.

While the youngest and oldest age groups have the lowest expenses, the middle groups – ages ranging from 34 to 54 – typically have the highest monthly expenses since they may be caring for dependent children and/or parents.

If you’re a young adult who struggles to keep up with your growing expenses, know that it’s very normal: Americans’ biggest leap in spending happens when they go from under 25 to over 25.

People in this group may have special financial needs, since young-adult budgets are often burdened by early-career demands and other major shifts like starting families, and some may even still be in school. People in this age group spend far more money than other groups on education, as well as on clothes and transportation.

Here’s what the BLS found for 2023:

It’s a good idea to find out how much you will need to save for retirement.

Breakdown of Main Household Expenses

No matter how old or young you are, how small or large your family, or how much money you make, there are several items that will always make up a large portion of your expenses. Here’s where you can expect most of your income to go.

1. Housing

Housing is the largest expense for people across every demographic, taking up an average 33% of monthly household spending from 2021 to 2023.

However, the housing burden is higher in households where there’s one single person, or just one parent raising a child or multiple children. For the average single parent, housing accounts for 37% of all spending.

2. Transportation

If having a home takes up the largest portion of monthly expenses, getting to-and-from home is the second largest.

Transportation, which includes car purchases, gas, and public transportation, is a major expense for American households. In 2023, it took up 17% of the average American’s monthly household expenses. That’s up 7% from 2022.

A few ways you might be able to cut back on spending in this area are by downsizing to a smaller or cheaper vehicle, or even selling your second vehicle (if applicable). Additionally, with gas prices so high, a deal-finder app like GasBuddy or AAA Mobile can be your best friend when it comes to saving money at the pump.

3. Food

Food and groceries form a big umbrella category that includes several different types of spending. In 2023, the average person spent $832 a month on food, but we can break it down a little further:

• Food at home: $504
• Food away from home: $328

As you’ve surely noticed, this expense has been on the rise in recent years. It went up by nearly 13% in 2022 and by almost 7% in 2023.

Want to save money in this spending category? Eating at home is a great money-saving alternative to dining out. Additionally, weekly meal-planning and shopping in bulk can help alleviate some of the pain at checkout.

4. Personal Insurance and Pensions

Most of your monthly spending probably goes to day-to-day needs. But for the average American, saving money for the future is also a priority. According to the BLS, over 12% of spending goes to personal insurance and pensions, a number that has slowly crept upwards in the last few years. This category also includes:

• Social security withholdings
• Deductions for private pensions
• Contributions to retirement plans

For many Americans, keeping up with daily expenses makes it a challenge to fund their future needs. However, your employer might be of some help.

If your job offers a matching contribution, that means they’ll put money into your account whenever you make your own contribution. On top of that, contributing to your employer-sponsored retirement plan can help reduce your tax bill.

5. Healthcare

The healthcare expense category includes health insurance premiums, out-of-pocket expenses, and prescription costs.

In 2022 and 2023, 8% of Americans’ household spending went to this category. Breaking it down to monthly spending, the average expense per person was $513. But that’s just on average. Depending on your coverage and health conditions, the cost can rise dramatically.

For those who are not insured, the best way to cut down on exorbitant emergency expenses is to purchase coverage. If your income is limited, be sure to check and see if you qualify for Medicare or a discount through your state’s insurance marketplace (sometimes referred to as Obamacare).

6. Entertainment

After necessities are covered, Americans like to spend money on entertainment, which is a wide category that includes a variety of costs, such as:

• Event tickets
• Hobbies
• Toys
• Playground equipment
• Pet expenses

In 2023, the average spending in this area was $3,635, or $303 per month.

Is it possible to cut these costs? Sure, you can cut your entertainment costs and never do anything fun, but living that way for the long term leads to more stress, burnout, and even costly health problems.

If money is tight, think instead of swapping pricey entertainment for free or cheap alternatives. For example, you might enjoy free game nights with the family or going on group bike rides even more than dropping money on movie tickets and expensive theater snacks.

How Does Inflation Impact Average Household Expenses?

Even for the most frugal person, your plans can be disrupted by economic forces like inflation. As inflation goes up, the price of everyday goods rises, making necessities like groceries and gas harder to afford.

Unfortunately, periods of inflation are not usually accompanied by increases in your pay. That means that even if you had a well-balanced budget before inflation hit, your spending can start to outweigh your income as prices rise.

What can you do? To prepare for seasons of inflation, it’s best to create an emergency budget in advance — one that shows everything you can adjust if needed. Planning ahead, and doing it when you’re not under pressure, will give you the time and breathing room to look for what can be changed in your budget.

But if an inflationary period is already in full swing, revisit your budget as soon as possible instead of hiding from the problem. The faster you adjust, the more financial pain you’ll avoid.

How to Budget Your Household Expenses

The information from the BLS shows you how your spending compares to others in your demographic. Yes, looking at national averages can certainly be helpful, but the reality is that each person and household has different needs.

Ultimately, your household needs its own unique budget.

Despite what you’ve heard, creating a budget doesn’t have to be hard. If you can write (or type) a list of all of your monthly expenses, and then compare the total to your income, you have the makings of a budget. Using a budget calculator will make it even easier.

If your spending exceeds your income, you’ll definitely need to look for things you can change, like non-necessities you can cut out, or areas of opportunity to earn more income.

Changes like this are also important to make if you’re in debt or you’re unable to save for emergencies, upcoming purchases, or retirement.

If you’re not sure how to make the right adjustments, call a certified nonprofit credit counseling agency. Counselors at these agencies are experts at helping people create affordable budgets and eliminate debt.

Average Monthly Expenses by Region

If you’re really looking for a way to cut your spending, moving could be the key. When you look at spending by region you’ll see why.

For the average family, moving from the western United States to the South could mean reducing your average annual spending by over $15,000 a year. That’s a savings of almost $1,300 a month. And the savings could be even higher if you move from a high-cost city like San Francisco to a rural southern area.

Annual Expenses by Region

Tools to Compare Your Spending

To see how your spending compares with other households, you can keep an eye on the BLS’s Consumer Expenditure Survey. But their survey is only updated once a year.

If you’re looking for more tools, you can also look at the National Financial Capability Study from the FINRA Foundation. Their data on spending behavior, which is published each July,  looks specifically at Americans’ financial knowledge. You can also take their Financial Knowledge Quiz to see how you compare.