I came across a 5 year old magazine article this morning while decluttering that said the average American spends as much on housing each year as they do on food, transportation and entertainment combined.
Do you really think that’s true?
Housing – House payment, insurance, property maintenance, stuff to fill the house, utilities etc.
Transportation – Vehicles, gas, tabs, repairs, maintenance, tools, public transportation etc.
Food – Groceries, dining out
Entertainment – Whatever floats your boat I guess
Maybe we are just really, really boring people who don’t eat exciting food or drop Benjamins to keep entertained but still, it makes me wonder if people really are spending as much on housing each year as they do on food, transportation and entertainment combined. Maybe we’re weird because we don’t have a camper or a boat or other sorts of toys like our friends and neighbors do. We don’t {typically} buy fancy food or go to the latest movies either.
While we do own a nice car, our second car is an old convertible that’s maybe worth $3,000. The only thing we splurge on is vacations… but that wasn’t even included in the article.
What do you think?
Was the article was accurate? Do you spend as much on your home as you do transportation, food and entertainment?
Inquiring minds want to know.
~Mavis
Marcia says
Hmm. I guess that is going to depend on where you live (housing costs) and what you consider entertainment. Is internet a utility or entertainment?
Plus, kid stuff, where does that fall? (Swim lessons, baseball fees.) Is a gym entertainment? We generally would put a gym membership, wine, and movies as entertainment. Among other things.
In any event, living in Coastal Southern California, my housing costs are approximately $50k per year. No way I spend that much on food and entertainment. I have friends, however, who spend close to $24,000 a year on food, and casually mentioned their entertainment costs are similar.
Our cars are small, older, and paid for. So our auto costs are not very large.
Cheri says
I live in an area with a very high-cost housing market (Denver metro), and we have to rent. So unfortunately, yes, we probably spend about as much as those three expenses combined or more. We don’t spend a lot for entertainment, and our gas bill is pretty reasonable because work is fairly close to home, but all those things do add up, plus we have car loans and food is expensive here ($100 / month is impossible if food isn’t homegrown).
Jules says
Renting an apt in the Bay Area is 3k/mo for me right now. Maybe that’s the same as I’m paying for all my other bills, but not just for food, entertainment, and transportation. . . Though I wish my food/entertainment/transport budget was that high every month!
Claire says
We live in Canada, but really, it is all relative. There are choices to be made in all expendable areas of life. There are uber-expensive and less expensive choices to be made all round. Personally i think many of these articles just pull a number out of thin air to make us think that the Jone’s have it all figured out!
Melanie says
Hey Claire, I think you’re right about the articles pulling numbers out of thin air. They do whatever it takes to get readers and they keep writing outrageous articles. Everyone has different priorities and ways they want to live so I can’t let these articles make me feel that I’m doing something wrong anymore.
Kathleen says
My parents bought a house for $6,000 in the late 50’s on a 10 year loan.
I bought a 9 acre hobby farm in 1974 for $28,000 on a 15 year loan at $217 per month payments (Gosh I wish I still had that place and all the development around it would go away). And the neighbors laughed because my farm was sold for only $16,000 two years before so I was immediately underwater.
My current home was $118,000 in 1986 is 3,000 sf in a bit over an acre and was a 30 year loan. Yet I work in Seattle where a condo of 650 sf is $450,000. And 40 year mortgages. So yes, I think housing prices are absolutely evil and obscene prices. The problem is that there is so much rapid growth here there is no “alternative” for affordable housing. And I drive an hour to work each day and an hour back…unless road construction which then makes the trip 2 hours or an accident. But as long as people pay those prices, housing will cost more.
Cheri says
Denverites are in really bad shape. Housing is terrible here. I recently realized what a good rental deal we got for a 4-bedroom house in an affluent area. It is way under market at $1500/month. The norm here for any kind of house in a good area is over $2000/month. Townhouses and apartments aren’t much better, if at all. We may not be able to stay in this city long.
Linda says
I try really hard to not spend money on things i cannt afford. My mortgage is 500.00 a month. I am trying to save for retirement. Entertainment is Netflix and grocery shopping is always the least i can get
Deborah Ray says
My husband and I bought a house this year in cash, so we’re definitely weighted on that side this year! But even averaging that cost out over a few decades (and despite the fact that I refuse to buy furniture when so many people are trying to get rid of theirs for free) and adding in maintenance, utilities, taxes, and insurance, housing definitely still comes out on top.
Is it that wrong for housing to come out on top? Transportation shouldn’t cost much when you have good public transit available. Entertainment should be a minimal expense because, hey, libraries! (Although my husband loves buying video games and such.) And food (even local organic food when available) is a reasonable amount if you’re not a spendthrift.
…Maybe I could even it out if I lived far away from the city for cheaper housing but had to get a car.
Teckla says
Yeah, I think it depends on location (Willamette Valley, OR, bedroom community) size of family and lifestyle choices. I padded my housing costs and still less than half the other. Yes, I could make better choices on food, etc., and have been working on that goal. But a lot depends on a person/couple’s/family’s choice of lifestyle. I am constantly working to simplify my life and reduce my footprint, now that I am retired and have more time and energy to do so, as well as some financial incentive. I’m a widow and maybe I am one of those dull, boring people, but I’m happy and that’s what matters to me. LOL
Mary says
If you are paying rent in Metro Denver you are paying as much as half your income on housing. And buying a house is so expensive here that it could easily eat up half a family’s income.
Cheri says
Yes, it is awful and getting worse. My husband and I wonder where we will go if we lose the good deal on the rental we have in the south metro. Down by DU there are a number of little, older houses for rent. When I looked these up on Zillow out of curiosity, I was shocked to learn that $2500 for these little places–1/2 bedrooms–was normal. We can’t afford anything like that if we should lose this house before we’re ready to buy.
Amanda says
I guess I lucked out in Suburban Kansas City. Although the house we did buy was half as much as what we were approved to buy. I think that people just buy as much house as they can get financed rather than what is reasonable, which results in half your income going towards housing.
Colleen says
When my husband and I were approved a couple years ago, they gave us a limit of like… 280k… the house that lined up with our needs, and our desired cost of living was 120k.
I think mortgage companies are the devil, and give these CRAZY high loans to people and then that causes the dang housing market to bubble and crash.
Good job in not letting the fancy high number turn your head and make you spend more!
Jen Young says
Everyone who reads your blog is definitely above average! 😉
I guess we’re not average. We haven’t had a house payment in 18 yrs so only insurance & taxes. We have done some remodeling in the past few yrs & done regular maintenance on it.
Our newest car is 20 yrs old bought about 15 yrs ago; though we are saving to pay cash for our next car.
I’ve never considered myself average though.