Houses and cars. They fatten the economy and thin our wallets. Without them, recoveries don't feel like recoveries. The real estate and auto industries account for $1 in every $2 spent by the typical U.S. family, according to the Bureau of Labor Statistics. Here's your color wheel of spending...
A more detailed recent report shows how families with different education backgrounds—a common and useful proxy of income level—divide their cash between movies, mortgages, and dinners at restaurants.
Families led by somebody with a BA makes about 2X more than families without a college graduate. But their spending breakdowns are familiar:
- Housing: About a third of all family budgets: families with a bachelor's spend 32 percent of their income on housing; for families without a degree, the figure is 33.7 percent
- Transportation: About one-sixth of all family budgets: 17.1 percent for the college-grad family; 18.9 percent for non-grad families
- Food: About one-eighth of all family budgets: 13.8 percent for college-grad families; 12.6 percent for non-grad families
Families led by HS-grads average about $35k in annual expenditures. For the next group up, high school-plus-some college, average income rises to $43k. For families led by a college-grad who doesn't have an advanced degree, it's $63k. As you can see, richer families need a slightly smaller share of income to eat, live, and get around, leaving more for insurance, dinners out, and luxuries (other). But the division of spending is pretty similar across seriously different income levels.