How Americans spend their money

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.visualcapitalist.com/how-americans-spend-their-money/

Visualizing How Americans Spend Their Money, by Visual CapitalistToday, consumer spending represents 68% of U.S. GDP, with much of this used for housing, transportation, and healthcare costs.

More than ever, Americans are using debt and credit cards to fund these purchases. In the second half of 2024, household debt hit a record $17.9 trillion. At the same time, credit card debt surpassed a historic $1 trillion, climbing by 8.3% over the time period.

Housing $25,436 32.9%
:red_car: Transportation $13,174 17.0%
:shield: Personal insurance and pensions $9,556 12.4%
:hospital: Healthcare $6,159 8.0%
:apple: Food at home $6,053 7.8%
:plate_with_cutlery: Food away from home $3,933 5.1%
[end quote]

Of course, every household will be different.

I remember a time when financial advice was to spend about 25% of income on housing. The increase to 33% puts a strain on family budgets.

The increase in credit card debt is concerning because high interest can eat a budget alive. If household income drops (e.g. due to job loss in a recession) this could bankrupt families.

A household with house and card owned free and clear and no debt is in an advantageous position but this is not the average.
Wendy

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The spending of the USA public is insane.

Like Wendyā€™s grandmother, my grannies were tough budget and investment analysts, but they always started and ended with cutting idiot household costs, and considered fancy autos (e.g. new ones), short lived clothing (e.g. stylish), and eating out with any frequency to be obvious signs of immorality based on delusion, snottery, and idiocy.

Who will the Trumpsters blame?

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Anyone but themselves, we know that!

Pete

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Well, my parents came through the depression, money just wasnā€™t available, they repacked, sold dried fruit, prunes, dates, raisins, citrin, pineapple, JMC brand, and when they needed, wanted to travel from CA to MT, they packed up a bunch, sold it along the way to cover their costsā€¦ By the '40s when I came along, they were still struggling, and made or fixed everything themselves, Mom had been a trail cook in MT on roundups, great cook, made her own mayonnaise, best bread ever, and they canned everything from green beans to fruitsā€¦ Frugal, foreverā€¦ Dad was a carpenter as long as he could, again, no new cars, extrasā€¦ I donā€™t remember ever eating ā€˜outā€™ as a kid, one time at an Italian restaurant, but it must have been when I was real young, donā€™t recall what was served, just the name, Freddianniā€™s, outside the small nearby town of Sebastopolā€¦ So no investments, hand to mouthā€¦ Just the way it wasā€¦ You need it, make it!

Ourselves, we did well, invested, but I know my eldest brother had our parentā€™s attitude, where I would toss and buy new, he fixed it, bailing wire, wood bits, made it workā€¦ I guess I missed that gene, but I donā€™t have the same worries they had, so far! Only bought 2 new vehicles, well, 3 now with the Toyota, but before it, a '95 Chevy PU, and earlier a '70 Maverickā€¦ The Chevy turned out to be a lemon, but that Maverick went way over 200K milesā€¦

Changing, crazy timesā€¦

JMC label
JMC label261Ɨ170 23 KB

JMC Fordson
JMC Fordson924Ɨ532 119 KB

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Beautiful post. My beloved old California, although my family were mostly Marin and south.

One high school summer I worked a south Sierra Nevada lumbering camp under an old backcountry cook, and she taught me lumber camp made mayonaisse, eatable out of the can green beans, 200 scrambled eggs real damn fast, red beans with garlic greens, and old fashioned buttermilk and soda raised coase grained corn bread. Your description of your mother brought my teacher back to me ā€” thank you.

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They lived through hard times, and yes, Mom could make great gravy from near nothing, always had a can of bacon grease on the stove, we had home made bread sandwiches, donā€™t recall what was in them, likely PB&J, while going to school, using the leftover raisin bags for years, none survived, that label was all I have of that time, Dad was not for having onto stuff, so I guess when Mom passed, he dumped, burned a lot of things that might have been interesting today. I know there was drawer full of pictures, negatives, glass plate negatives that vanished, many were of Momā€™s side, meant little to him, but Iā€™d liked to have them to maybe piece more of their history together.

Ahh yes, I worked all over Marin, West Marin is very like our Sonoma County, farms, green rolling hills, and not too populated, but along 101, both counties have filled up with so many people, now having to hit the road as companies want them back in the officeā€¦

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Iā€™ve calculated that the Big 3 for upper income folks (investment expenses, housing skim, and health care & insurance fraud) is about one-third of your after-tax income. If you can take back a lot of that by paying attention to what youā€™re doing, itā€™s a huge number.

You donā€™t have to invent something, start a business, or do anything special to retire early. Merely preventing yourself from getting screwed, and investing the savings in the S&P 500 is enough to do it for you.

I bought a $179 OTC hearing aid last week at Best Buy (with a 60-day money back guarantee) that now has me passing the online hearing test and watching TV without the ā€œClosed Captionsā€. The $1,500 I saved by not going to CostCo will grow and compound in my investment account until and if the need materializes for something stronger and more expensive.

Minimizing the Skim ā€“ The key to retiring early.

intercst

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Actually a rented home may be more beneficial in the case of a job loss.

When I was working for Exxon in the mid-1980ā€™s and the price of oil dropped from $40/bbl to $8/bbl, something like 30% of the industryā€™s work force got laid off. It wasnā€™t uncommon to see colleagues who had to move out of town to find a job bringing a $30,000 or $40,000 check to a real estate closing AS THE SELLER. I donā€™t think Grandma warned you about that.

intercst

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Which one did you choose in the end?

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Thanks for asking. I see I can now get another $30-off by exercising my price-matching rights. {{ LOL }}

What I liked about these is that they are ā€œUniversal fitā€ ā€“ you can use the left side device (I donā€™t use) in your right ear and effectively double the battery life.

intercst

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