How do ordinary Americans spend their money? And how has spending changed over time?
Start with this. It’s a breakdown of what the average American household buys, based on government data (PDF) for December 2011.
We didn’t include everything, but we included the biggies, as well as some smaller categories that caught our eye.
Update: Several readers have asked about spending on education and child care. Good question! In the average household, 3 percent of all spending goes toward tuition and child care.
This is clearly a case where there is lots of variation around the average. Many households have little or no direct spending for tuition and childcare; in other households these things account for much, much more than 3 percent of spending.
We can also use this data to see how Americans’ spending patters have changed over time. Here’s a comparison of spending in 1949 versus 2011.
One thing that jumps out here is the relative decline in spending on food and clothes. This is largely the result of incredible productivity increases in agriculture and manufacturing that have made food and clothes much, much cheaper in real terms.
The Atlantic recently looked at how consumer spending has changed over the past several decades. Here’s how they parsed some of the key shifts:
Across the economy we can see that items that require fewer and fewer American workers per completion (think: socks) get cheaper, while services that can’t find similar ways to replace American workers (think: health care … ) don’t get cheaper at all. In fact, they often get more expensive.
This isn’t bad news, necessarily. A rich economy that needs fewer people to make things can put those people to work doing other important things. We should want workers to move into new industries that serve our needs. But too many workers serving a need leads in one direction for prices: Up.
The jump in spending on housing between 1949 and 2011 is also striking. It’s worth noting that people are buying (and renting) much bigger homes today. In 1950, the average new house was less than 1,000 square feet; in 2000, the average new house was over 2,000 square feet.
The rise in spending on transportation was driven by the spread of cars. In 1950, there were only three vehicles for every 10 Americans. By 2000, that had risen to eight vehicles for every 10 Americans.