The poorly kept secret to long-term financial health is spending less than you make, but for many Americans that’s simply not possible, according to a new analysis of federal data.

A visualization by Engaging-Data.com reveals how the average American household spends and saves based on spending data from the U.S. Bureau of Labor Statistics. For the purpose of the analysis, the average American household is comprised of 1.3 income earners, 0.6 children and 0.4 seniors.

The total average American household income is $73,574, including a salary of $62,096, plus an average of $8,300 in Social Security income.

On average, Americans save $9,898, or 13.5 percent of their income each year, while $7,819 (10.6 percent) goes to federal taxes and $2,149 (2.9 percent) goes to state and local taxes.

That leaves nearly three quarters of the average income, or $53,708 leftover for general spending.


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The average American household spends 22.1 percent of their income on housing, 4.6 percent on utilities, 7.5 percent on vehicles and 9 percent on gas and auto insurance. Other major expenses include groceries (8.1 percent), health insurance (6.4 percent) and eating out (8.1 percent).

Americans also donate an average of 3.5 percent of their annual income, or $1,873, to charity each year.

The analysis gets really interesting, however, when broken down for different income brackets. Engaging-Data divided Americans into five groups – or quintiles – based on income.

The lowest quintile of Americans have an average household income of $25,525, based on a $3,663 annual income, $5,871 in Social Security, $13,590 in borrowed money or from draw downs from savings and $1,781 in other income (including unemployment, workers compensation, or the like). The poorest Americans can also expect an additional $540 in tax returns.

For this low income group, housing accounts for 24.8 percent of all spending each year, while food at home accounts for 10.1 percent, utilities make up 6.4 percent, 4.8 percent on vehicles, 7.9 percent on gas and insurance.

Notably, this low-income group is unable to set aside any savings – setting them up for significant risk in the event of a financial emergency – such as a car accident, urgent home repair or medical costs. Despite that, this group spends 2.5 percent of total income on charity – an average of $650 a year.

The poorest Americans also spend a larger share of their income on housing than all other income groups.

American households in the second-lowest quintile are still quite poor, with a total income of $37,329, including an average salary of $16,960, plus $11,162 in Social Security and $6,821 in loans or drawn down from savings.

They also receive an additional $419 in dividends, an average $677 federal tax return and $1,280 in other income.

Housing costs average $8,286 for the second-lowest quintile, or 22.3 percent of all spending. Food at home accounts for 9.8 percent of spending, while utilities are 5.8 percent, gas and insurance is 9.4 percent and spending on vehicles is 7.4 percent.

Despite having to borrow or use savings to survive, this group spent $1,192, or 3.2 percent of their annual household income on charity.

The second-lowest quintile also have an average of zero money going toward savings.

The middle quintile of American households have an average annual income of $52,431, including a salary of $40,568, plus $9,873 in social security, $915 in dividends and $1,075 in other income.

This group spends just $46,443 of that and manages to save $2,895, or 5.5 percent of their income each year.

The single biggest cost for these Americans is housing, which amounts to $10,238 or 22 percent of their income. They also spend 5.2 percent on utilities, 7.6 percent on vehicles, 9.8 percent on gas and insurance and 8.7 percent on food at home.

This group gives an average of $1,485 to charity, or 3.2 percent of their annual income.

By the second highest quintile, it becomes clear that households in the higher income brackets live a very different reality than their poorer counterparts.

The average household income of $86,363 (including a $76,309 salary, $7,562 in social security, $1,365 in dividends and $1,127 in other income) allows this cohort to save $17,255 a year, or 20 percent of their total income.

That leaves $59,848 in spending, with 21.9 percent going toward housing ($13,127 a year), 4.6 percent going to utilities, 7.5 percent going toward vehicle spending, 9.8 percent on gas and insurance and 8.2 percent spent on food at home.

This group spends $1,873 a year, or 3.1 percent of their income, on charity.

The richest quintile have an average household income of $188,102, including annual salaries totaling $173,210, as well as $7,029 in Social Security, $6,784 in dividends and $1,079 in other income.

This group is able to save $49,865, or 26.5 percent of their income, each year, leaving $99,639 in annual spending.

The largest share of spending goes toward housing, at an average of $21,521, or 21.6 percent of their annual income. Utilities account for 3.5 percent of spending, while 8.3 percent goes to vehicle costs, 8.2 percent goes to gas and insurance and 6.7 percent is spent on food at home.

The richest Americans spend $4,170, or 4.2 percent of their income, on charity.


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