Where Americans—Rich and Poor—Spent Every Dollar in 2012

Food, clothes, and housing account for more than 60 percent of all spending among the poor.

Here it is, fresh from the Bureau of Labor Statistics: all of American spending in one big color wheel.

Since some of you (inexplicably) don't like pie charts, here's the same data in bars.

Averages are misleading, particularly when the rich are running away from the rest. So, digging deeper into BLS data, I broke out percent spending by category for the richest and poorest 20 percent.

For the poor, food, clothes, and housing account for more than 60 percent of all spending. The rich have more left over for leisure, insurance, and savings.

The term consumption takes on a more literal meaning when you see the difference between rich and poor spending. Cash-hungry families consume more of their income immediately, spending two in three dollars on absolute essentials like food and shirts. The rich are more predisposed to spend toward the future, with eight-times more of their income going toward insurance and even more going toward savings (although the bottom 20 percent includes lots of retirees on Social Security, the next quintile doesn't see much in the way of savings either).

There has been a good amount of research recently about how being poor changes your thinking about everything. "If you have very little, you often behave in such a way so that you'll have little in the future," Sendhil Mullainathan recently told Harold Pollack in Wonkblog. The poor don't plan as much for the coming years, because they can't afford to. 

Thinking about the future is a form of luxury.

Update: First graph edited to reflect housing's true share of spending.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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