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How does my spending stack up?

I came across this article on spending a little while back.  Naturally, I was curious how I compared with the averages.  I perform a similar break-down at the end of every year, so that I can see where my money is going.  By doing this exercise, I am able to see if any item is growing too large and make the necessary adjustments.

Housing

The article states that on average, people spend 33% of their income on housing.  Naturally, the percentage varies by income, with the bottom 20% of income earners spending closer to 40% and the top 20% spending about 30%.  When I think of my housing costs, I usually think of my mortgage payment, which includes the principal and interest payment, as well as, my escrow payment.

My escrow payment contains amounts for homeowners insurance, property taxes and mortgage-insurance premium (aka PMI).  I realize that I should have put down 20% to avoid the PMI.

When you make bad financial decisions when you are younger, you end up paying for them when you are older.  I think to make this comparison; I will use my mortgage payment as my housing costs.  By doing this, my percentage comes out to be about 31% of my gross pay.  So, it looks I compare favorable to the average and skew towards the top 20% of incomes.

Food

Again, in looking at the article, food accounts for 13% of the average spending, 16% and 12%, for the bottom and top 20%, respectively.  I guess I simply don’t spend as much on food as everyone else.

When I look at my spending for 2012, the percentage comes out to only 6.6%.  Included in my food spending are all food and paper products.  My wife and I don’t go out to eat much, with 2 small kids in the house and we generally cook all of our meals instead of buying prepared foods.  I’m not sure I could double our food budget to get to the average.

Healthcare

This is one area that I am going to be significantly higher than the average.  We had a lot of medical bills in 2012.  My percentage is about 14%, double the average of 7%.  Thankfully, 2012 is not a normal year for medical expenses for me.  On average, I probably fall right around the 7% average.

Insurance

In this category, it does not define which types of insurance are included.  I included my homeowners insurance in my housing costs and my medical insurance in my healthcare costs.

The rest, auto, disability and life insurance, I will include here.  My insurance costs remain stable from year to year.  My life insurance is locked in for 20-years and my disability does not change every year.

My auto insurance has also been pretty flat the last few years.  Using these to determine my percentage, I am at about 3%.  This in comparison with the article looks quite small.  I am not concerned though, as I know I have adequate life, disability and auto insurance coverages.

Entertainment

At 5%, the average American probably spends more money on Entertainment than they invest. The Entertainment stats weren’t broken down but I’m sure there were pieces in that 5% for Video Games, OSG, the latest and greatest gadgets. I tend to spend less than the National average on this category.

Overall

In general, I am comfortable with where my money is going.  It is just interesting to me how I compare to the rest of the population.  How do you compare?

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