Sunday , 23 June 2024

How the Poor, Middle Class and Rich Spend Their Money (+4K Views)

How do Americans spend their money and how do budgets change across the income spectrum? The graph below answers these questions. Words: 240

So say Jacob Goldstein and Lam Vo ( in edited excerpts from their original article*.

Lorimer Wilson, editor of (Your Key to Making Money!) has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

The article goes on to say, in part:

The graph below shows average household spending patterns for U.S. households in three income categories — one just below the poverty line, one at the middle of the income distribution and one at the top of the distribution – and both the similarities and the differences are striking.

How The Poor, The Middle Class And The Rich Spend Their Money

Source: Bureau of Labor Statistics; Credit: Lam Thuy Vo / NPR

Everyone devotes a huge chunk of their budget to housing, clothing and shoes, and on food outside the home but poor families spend a much larger share of their budget on basic necessities such as food at home, utilities and health care.

Rich families are able to devote a much bigger chunk of their spending to education, and a much, much bigger share to saving for retirement. (The retirement line includes contributions to Social Security and to private retirement plans, by the way.)

* (The figures in the graph come from the Consumer Expenditure Survey, which has tons of data on spending patterns in the U.S. For a historic look at spending in America, see our post What America Buys. For more, see our Graphing America series.)

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