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Are You Spending Too Much?

Whether you earn a little or earn a lot, from time to time many wonder: “Am I spending too much?”  What’s “too much”, and how do I know?  This answer is different for everyone, but there are a few tricks you can apply to get to an appropriate answer.  

 Step 1: Track your spending  

The first step is to track your spending.  To get a good average, it is important to track your spending for at least 90 days, preferably longer.  It may seem complicated, but I assure you it is easier than you think.  There are plenty of resources and methods available to help.  These methods include: 

  • Using premade forms and charts 
  • Using a planner 
  • Using a calendar 
  • Keeping receipts and bill statements  
  • Using programs or software  


Whichever method you choose to use is fine, but just remember to track where your money is going.  Do you remember the adage, “garbage in, garbage out?”  This means including small expenses as well as large will give you a more accurate picture of your spending.  After a while it will become second nature and a part of your daily routine.  Soon you will be able to see some spending behaviors that might surprise you.  Once you can view your spending habits, you will be ready to create an effective budget.  

Step 2: Compare your spending to national averages 

Now that you have your averages, let’s compare to national averages provided by the U.S. Department of Agriculture (USDA).  It is important to remember that the average household is equivalent to 2.5 people, so the numbers you use for your budget many differ, and that’s okay.  These are guidelines for you to use, not absolutes.    


Food expenses have proven to be the most challenging expense to track. This is due to the effort associated with tracking all food related costs such as grocery expenses and dining out expenses. 

According to USDA figures, the average household spends around $55 dollars per week on each person. This means that for an average family of 2.5, they would expect to spend around $137.50 dollars a week, or $550/month on food.  Again, your average food costs could be higher or lower than the national average based on the number of members in your family.  


According to USDA figures, households on average spend $18,886 a year. This includes a household mortgage payment or rent, utilities, household supplies, and furnishing.  

Let’s break it down by category:  

Housing: $927 a month ($11,128 a year) 

Utilities/Public Services: $323 a month ($3,884 a year) 

Housekeeping Supplies/Home Furnishing/Home Operations: $3,874 a year 


The average spending for transportation is $150 dollars per month per vehicle.  For the average two-car family this means about $9,050 is spent per year on transportation.   

In addition, it is important to include the cost of gas in your transportation expenses, and the cost of a gallon of gas can fluctuate between a couple of dollars and five dollars.  It makes a big difference where you fill up, because the cost of gas can add up!  The average household spends about $159 dollars per month on gas ($1,909 a year).  

Other expenses associated with transportation include regular maintenance, which averages $2,884 dollars per year.  Though it may seem like a good idea to cut expenses here, ensuring your vehicle gets yearly maintenance is essential in preventing larger repair bills in the future.  


USDA figures reveal that the average household spends $384 dollars per month on healthcare, or $4,612 dollars each year. 


USDA figures reveal that the average household spends $242 dollars per month on entertainment, or $2,913 dollars per year. This category is where cutting back on expenses could be most effective. This category of expenses, especially with children, can get higher every year so it’s one to watch closely.  


The average household spends $150 dollars a month on clothes, or $1,800 annually.   

Again, do not use these numbers to create your own budget.  Instead, track your spending to determine if your spending aligns with these national averages.  If not, you should begin looking for ways to reduce spending.