What a 2016 Monthly Budget Would Look Like in 2026 Dollars
Written by
Marc Guberti
Edited by
Brendan McGinley
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Inflation gradually reduces the purchasing power of fiat currency, and it’s easy to see this effect if you look back 50 years, but you can even see its effects if you zoom back just 10 years.
For example: the 2016 Consumer Expenditures Survey (CE) found that the average American spent $57,311 in 2016. That comes to $4,776 per month in 2016 dollars, which equates to $6,410.43 per month in present dollars. By examining how people. spent money across different categories in the survey, we can extrapolate what a 2016 monthly budget would look like in 2026 — and how the reality of our present differs from projections.
Housing Is (and Was) the Biggest Expense
Unsurprisingly, housing was the largest expense in 2016. The average person spent $18,886 per year on housing, which comes to $1,574 per month in 2016 dollars, or $2,112.65 in today’s dollars. This monthly expense includes the house, utilities, fuel, household operations, housekeeping supplies, furnishings and equipment.
The average income before taxes was $74,664 during this time, so all housing costs took up 25.3% of pre-tax income. Housing costs increased by 2.6% in 2016, with rented dwellings and other lodgings leading the way.
Finding a place for $1574, though not uncommon in 2026, is definitely on the downward slope. The most recent CE, published in December of 2025, puts average housing costs at $26,266, or $2,189 a month: just about in keeping every month (though that $77 bump costs almost a grand more per year). The median income before taxes was $104,207, not to be confused with the approximately $68,000 mean. Therefore, that $26,266 is 25.2% of pre-tax income, a tight match.
It’s worth noting that the Official Data Foundation found a housing inflation rate of 40%, above the 37% inflation between CE surveys.
Transportation and Food Were the Next Two Big Expenses
Transportation and food were the next big spending categories, coming in at $754 and $600 per month, respectively. That’s $1,012.03 and $805.33 per month in present dollars. Transportation costs actually dropped in 2016, with vehicle purchases seeing the biggest reduction in the monthly spending. Gas expenditures fell by 8.7% in 2016, after declines in 2014 and 2015.
Eating food at home helped people avoid inflation, as those expenditures only increased by 0.8% year-over-year. However, the costs associated with food away from home jumped by 4.9% in 2016.
These days you’re likely to spend $13,318 on transportation and $10,169 each year, i.e. monthly costs of $1,110 and $847. You’re not wrong: things are getting more expensive.
Other Notable Categories
The Consumer Expenditure Survey breaks down several spending categories, in addition to the three highest costs. Healthcare is a notable expense that gets higher as people get older, but the average person only spent $384 per month on healthcare in 2016, or $515.41 in today’s dollars, a near-exact match to the most recent survey’s $516.41 number.
Entertainment came to $2,913 for the year, or $243 per month, in 2016. These days it’s $301. During this same year, people allocated less than $10 per month to reading-related expenses. Education costs, as a whole, were $111 per month in 2016 dollars, compared with our $131 per month real spend now.
“Personal insurance and pensions” was another large category, with pensions including Social Security taxes. That figure came to $569 per year for the average person in 2016, or $763.72 per month in today’s dollars. Actual cost these days: $816.
Raising Your Income Is the Only Way To Beat Inflation
The 2024 Consumer Expenditure Survey’s data showed a steady increase in costs compared to 2016 data, and the 2025 survey will likely show the same result when it becomes available. Average annual expenditures came to $78,535 that year, which averages $6,545 per month. That’s a 37% increase compared to 2016 prices. Housing, transportation and food are still the three largest expenses.
The average income before taxes was $104,207 in 2024, which represents a 40% increase. This data suggests that wages have barely kept up with expenses, but it also assumes workers received steady raises over the past decade. Someone who held the same salary during this time saw their expenses jump by 37% without a corresponding increase in annual earnings.
Finding ways to reduce your housing, transportation and grocery expenses can also free up more space in your budget. There are multiple strategies from the extreme (homesteading) to the major (downsizing your home) to the everyday (buying a used car) that also work. The key is to find opportunities that work within the framework of the life you want to have.
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