Basic Household Budget: What Families Spend their Money On

Every family has unique needs. Their expenses usually vary based on their lifestyle, the number of members in the family, the neighborhood they live in, and the amount of food they consume. But you’ll be surprised to know that many families share a lot of things in common. Here, we will delve deep into these things and talk about the most common expenditures of a typical American Family.


Housing accounts for roughly 16% of a family’s budget. This expenditure is one of the most basic ones that are non-negotiable because everyone needs a roof above their heads. In the United States, 64% of families own a house, and they spend roughly USD 800 per month on mortgage, property taxes, insurance, interest, and maintenance such as repairs.

The cost of housing greatly differs based on its location, amenities, and the number of baths and bedrooms. In 2020, the National Association of Realtor (NAR) put single-family homes and townhouses at USD 285,000 while a median top-tier house is at USD 199,000.

Monthly rent, on the other hand, is another huge chunk in a family’s monthly budget. Currently, the average price of rent in the United States is USD 784 per month. This number is just a little lower than what homeowners pay.

Aside from the down payment and monthly rent, non-homeowners also shoulder the cost for maintenance, amenities like electricity, water, and gas, and the renter’s insurance which roughly costs USD 9,477.

Household Maintenance and Utilities

Buying a house or securing a rental property is not the end of the story. There is also the cost of keeping the house up and running. Generally speaking, an American family spends around USD 7,100 per year on house services and products. Basic amenities like cooking fuels or gas, heating, electricity, garbage collection, water, and phone service have a combined monthly cost of roughly USD 320.

Other expenditures under this category are house cleaning, mowing, pest control, home security system, and babysitting that amount to USD 132 per month. Homeowners and renters also spend around USD 2,210 per year on home equipment and furniture.


Transportation is the second-largest expenditure of a family. On average, transportation costs of a single household can cost roughly USD 9,000 per month, which is more than the price of monthly rent. Aside from the upfront cost of car purchases, 90% of families in the US spend an estimated USD 350 per month or USD 3,000 per year on gas.

Many are still paying monthly costs for their vehicles, like auto loans or financing. There is also car insurance, which is around USD 907 per year. Other families that do not own cars, and their budget for public transportation can cost around USD 225 per month.

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An estimated 60% of a family’s monthly income is spent on food either cooked at home or takeouts. These statistics are still subject to changes based on the number of family members, but in general, the rough budget is USD 550 per month or USD 2,600 per person per year.

Liquid non-alcoholic beverages like bottled water, coffee, tea, colas, and fruit drinks take up 6% of the monthly food budget. The next two largest categories are microwavable foods, canned goods, and fresh fruits. Other items on a typical grocery list are:

  • 1 Liter of regular milk – $0.85
  • Loaf of bread (500g) – $2.75
  • A dozen eggs – $2.30
  • Local Cheese (1kg) – $11.05
  • Chicken Fillet (1kg) – $9.15
  • Ground Beef (1kg) – $12.58
  • Potato (1kg) – $3.00
  • Apples (1kg) – $4.50
  • Water (1.5 liter bottle) – $1.80
  • Bottle of mid-range wine – $12.00

Families that earn more than USD 70,000 annually spend nearly three times more than a household with a combined annual budget of under USD 20,000. The more well-off families spend a huge number of their income on take-out food or restaurant meals.

Pension, Personal Insurance, and Social Security

Many American households spend a portion of their earnings on securing their future. A typical family can spend USD 5,530 on Social Security Taxes, life and disability insurance, and pensions. Most of these are paid automatically by employers by deducting a certain amount on an employee’s salary, while others that are self-employed choose to make voluntary contributions.


Around 6% of a family’s income goes to healthcare. Health insurance in the United States costs around USD 285 per month. However, around 12% of Americans have no health insurance. Not having a subsidized coverage plan can cost USD 12,250 per year. Families also pay out-of-the-pocket for doctors’ fees, medical supplies, and prescriptions.


Education is a non-negotiable expense for every family. Reports show that parents today spend 35% more on education than what they were paying in 2013. Households report spending nearly USD 7,408 on education. Other education-related expenses are:

  • Private Kindergarten or Preschool for 1 child – USD 959 per month
  • Private Primary School for 1 child – USD 16,000 per year

These are the most common yet significant expenses of every family in the USA. Prices continue to increase because of the current pandemic, and many households are barely keeping it together. However, proper budgeting does a lot of help. Stick with the basics and focus on what your family needs.