What Is the Average American’s Budget?

african american couple budgeting together in their house
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Like many people, you’re trying to stretch your dollar as far as it can go. Part of this is making sure your average monthly budget is at least somewhat aligned with the average American’s spending.

See: How To Build Your Savings From Scratch

As of 2021, the average pretax income of all consumer units in the U.S. was $87,432, according to the Consumer Expenditures Survey, published by the Bureau of Labor Statistics. Consumer units are families, single people living alone or sharing a household with others who are financially independent, or two or more people living together who share major expenses.

What Is a Good Monthly Budget?

A budget is a very personal thing. Many different factors will go into setting your average budget, including your income, the number of people in your household, where you live, lifestyle factors and personal preferences.

Therefore, it’s unlikely any two households will ever have the exact same monthly budget. Despite that, it can be helpful to see average monthly and yearly breakdowns showing how much other households are spending.

The BLS Consumer Expenditures Survey highlighted spending across several major budget categories. In total, average annual expenditures for all consumer units were $66,928. Here’s a snapshot of spending in several key categories.

Key Average Annual Expenses

Expense Yearly Cost Monthly Cost
Food at Home $5,259 $438.25
Food Away From Home $3,030 $252.50
Total Food $8,289 $690.75
Housing $22,624 $1,885.33
Apparel and Services $1,754 $146.17
Transportation $10,961 $913.42
Healthcare $5,452 $454.33
Entertainment $3,568 $297.33
Personal Care Products and Services $771 $64.25
Source: Bureau of Labor Statistics

6 Tips To Set a Monthly Budget

How much is a reasonable budget? As noted above, your average monthly budget will be unique to your household.

Make Your Money Work for You

Having a budget — and sticking to it — is crucial to maintain good financial health. Use this advice to get a handle on your finances and create a budget that works for you.

1. Determine Your Take-Home Pay

You might earn $50,000 per year, but that’s not the amount that actually ends up in your bank account. Therefore, it’s important to figure out your net income because this is what you actually have to spend.

Net income refers to your wages after deductions for expenses like taxes, health insurance and retirement plans are taken out of your paycheck.

2. Identify Your Spending Habits

It’s hard to create a budget if you don’t know where your money is actually going. There are plenty of ways to track your monthly expenses — i.e., financial apps, spreadsheets or pen and paper — so choose a method that works for you.

Organize expenses into major categories so you can see exactly how much you’re spending in areas like food, housing and entertainment. From there, you can see if you need to reduce your spending in any of these groups.

3. Create Financial Goals

Following a budget allows you to achieve both short- and long-term financial goals. This can be anything from saving up for a summer vacation to paying off your student loans.

Figure out what financial goals you would like to accomplish so you can work them into your monthly budget. You can always reconfigure as you meet these goals or your priorities shift, so don’t feel like they’re set in stone.

4. Set Your Budget

After taking the time to get your finances in order, you’ll be ready to set your average budget for each month. Be specific with your spending limits in each category, but make sure you’re also being realistic.

Make Your Money Work for You

For example, it might sound great to halve your budget for food away from home, but if doing so is unrealistic, you’re setting yourself up to fail.

5. Monitor Your Spending

When you’ve set your budget, you’ll be ready to start spending wisely. Of course, it’s hard to stay on track if you don’t pay attention to how much you’re spending until the end of the month.

Therefore, you’ll want to keep a close watch on your spending to ensure you stay within the predetermined limits. If you do overspend in a certain category, try to offset this by lowering your budget in an extraneous category.

For example, you might reduce your clothing budget for the month if you overspend on dining out.

6. Make Changes as Needed

Your budget should be viewed as a fluid financial plan. As you experience life changes, you’ll need to make necessary adjustments.

For example, right now you might be wondering, “What is the average single American’s budget?” However, you could get married next year and combine finances with your spouse, creating a need to completely redefine your average budget in most — if not all — categories.

Find Your Ideal Budgeting Style

When it comes to finding ways to stick to an average budget each month, there’s no one-size-fits-all answer. Here’s a look at three popular strategies that might help you stay on track.

1. Proportional

Using this type of budgeting, you’ll divide your income into separate categories. One of the most well-known ways to follow this approach is the 50/30/20 rule. You’ll dedicate 50% of your after-tax income to needs, 30% to wants and 20% to savings and paying off debt.

Make Your Money Work for You

2. Pay Yourself First

Increasing your savings is the focus of this budgeting style. This is ideal if you’re working toward a major long-term goal and have the funds to save. Each month — or paycheck — you’ll put a certain amount of money in your savings account first, then use the leftover funds to cover your expenses.

3. Envelope

If you’re trying to reduce the temptation to rack up debt on your credit card, envelope budgeting might be the answer. Instead of paying with plastic, you’ll put cash in envelopes labeled for different categories, and when it’s gone, you’re done spending in that category until the money is refreshed next month — or pay period.


So, what is the average person’s monthly budget? The BLS numbers above gave you a general idea, but this varies greatly.

For a budget to truly serve you, it needs to be uniquely yours. Taking the time to crunch the numbers and find a strategy that works for you is an investment you can’t afford not to make.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.


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