How the Family Budget of Americans Varies at Different Phases of Life

For today’s guest post on how the family budget changes over time, please welcome fellow personal finance blogger James Paul.

We spend according to our age. Our needs vary as we grow old. Our happiness depends on how much you earn. The more we earn, the more we spend, and the happier we are. The American economy is built on the buying power of its citizens. They have many reasons to buy Black Friday sales, New Year sales, and discounts all around the year.

At different times in your life, your family budget will vary according to the stage you are in. Here are the average monthly expenses for 7 different phases. How does it compare to yours?

When you decide on the family budget next time, analyze the areas which cost you more and less. Studies show you tend to spend more as you grow old. Following are the ways in which Americans spend their earnings:

Family Budget of Americans at Different Ages

1. Young Adult (25 years)

This is the age to start planning for your marriage. Imagine planning your marriage sitting on a cliff with your girlfriend, asking her what all she wants to do? At that young age, you don’t have any responsibilities and have the liberty for lavish expenditure. The study conducted by Bureau of Labor Statistics (BLS) shows:

Average Monthly Expense Report
Housing $944
Transportation $527
Food $408
Healthcare $82
Education $214
Entertainment $113
Total (Average monthly family budget) $2733

50% of your monthly earning is towards your housing expenses. The interesting thing to note in this is that young adults spend a considerable amount of their earnings towards education. This is the age they are trying to get a grip in the industry so spending towards education is acceptable.

2. Millennials (25-34 years)

This is the age for settling down; it is the time to settle down in both career and marital life; time to earn fat paychecks. This is the right age to increase your assets and to clear your debts. Stable income gives you a clear mind to plan for the future. This is also the time your responsibilities increase and also your monthly expenditure towards family. Hence the family budget should increase.

Average Monthly Expense Report
Housing $1525
Transportation $815
Food $553
Healthcare $231
Education $94
Entertainment $216
Total (Average monthly family budget) $4339

The amount of money spent on family increases and the amount spent on self-improvement decreases. This trend is set to continue for life.

3. Family Way (35-44 years)

This phase of life is very interesting; most of us will have kids and would have settled down in our lives and career. As the number of members in the family increases, the family budget also increases. Kids’ education, medical expenses occupy the important part of our family budget.

Average Monthly Expense Report
Housing $1850
Transportation $912
Food $737
Healthcare $323
Education $98
Entertainment $266
Total (Average monthly family budget) $5445

5. Gen X (45- 54 years)

This is the generation which has seen the development of emails, mobile phones, and telecommunications. Your kids will be teens and heading to college. The chunk of your family budget will go towards transportation costs, their education, and other family expenses. The age is to look for passive income. Actually you should create passive income opportunities right from your teenage years so that by this time it would have stabilized and would start to generate a steady income to support your family.

Average Monthly Expense Report
Housing $1763
Transportation $982
Food $701
Healthcare $389
Education $222
Entertainment $276
Total (Average monthly family budget) $5813

6. Boomers (55-64 years)

This is the age when everything starts to decline from income, to food expenses and transportation. The major chunk of your family budget should be allocated for healthcare and other medical expenses.

Average Monthly Expense Report
Housing $1516
Transportation $835
Food $583
Healthcare $426
Education $97
Entertainment $277
Total (Average monthly family budget) $4898

7. Golden Age (65 years & above)

Most of us may or may not make it to this age but if we make it we are a few lucky people. Beaming with wisdom and respect, we look forward to face our destiny. Every expense in your family budget drops and only the healthcare expense occupies the center stage.

Average Monthly Expense Report
Housing $1294
Transportation $571
Food $459
Healthcare $480
Education $22
Entertainment $205
Total (Average monthly family budget) $3722

Summing Up

The American economy depends on the spending power of Americans. The expenses change with age. No matter what our age is, it is always necessary to plan the family budget. A penny saved in the young age is always a penny gained. Create a family budget and stick to the best extent possible. Hope this article gives you an insight of how you can start saving more and prepare yourself for a better future.

About James Paul

James Paul is a freelance writer & personal finance blogger. He runs a personal finance blog where he writes about money management to frugal living to insurance-related topics. When he is not writing you can find him trying new things in his basement.
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4 Comments

  1. Good insight. I guess the only thing I would add is that there could be added expenditures as life “evolves.”

    In thirty years, we may be spending money on an additional “necessity” that we can’t live without. As an example, thirty years ago I would have never thought that every individual would have a mobile phone. This expense, today is a given.

    Who knows in what may be down the line in the future.

    • Absolutely correct, Eric. I can even add in my lifetime the whole genre of cable and internet costs which now have become a “necessity” that no one could even have dreamed of in prior generations. That’s why it’s so important to keep thinking of new ways to be financially healthy in your future. Thanks for your comment.

  2. One of the biggest flies in the healthcare ointment is dementia. If my aunt didn’t have us and my brother watching over her she’d probably be in an awful nursing home in FL, instead of a good one here in NC. If you can no longer make decisions you’re confined to the options others choose for you.
    Mrs. Groovy recently posted…Building Groovy Ranch: Update 5My Profile

    • Healthcare is a subject that must be considered as a future expense even when you’re healthy now. Unfortunately I don’t think that a lot of people consider the expenses when they’re planning their retirement and when a situation like the one you’ve described arises, it can have a devastating effect, not only on them but on their families as well. Without the support of friends or family, it can be catastrophic. Your aunt is fortunate to have your help and support with her financial matters.

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