One of the first things you want to understand before starting any business is your target audience—more specifically, their spending capacity.
With more than $7.2 trillion in retail sales in 2023, the United States market offers lucrative opportunities to businesses. But to craft effective marketing strategies, we need to first get an overview of consumer spending habits in the US. This starts with answering the question: How much does the average person spend a year?
How much does the average American spend per year?
|
Year |
Average American spending |
Annual change |
|
2021 |
$66,928 |
+9.1% |
|
2022 |
$72,967 |
+9.0% |
|
2023 |
$77,280 |
+5.9% |
Average American spending per year
According to the latest statistics, the average cost of living in America (based on average yearly expenses) hit $77,280—an average of $6,440 per month. For more context, the average US income (before taxes) was $101,805 (or $8,484 per month).
2023’s figures represent a 5.9% increase from 2022, during which average consumer spending in the US was $72,967. Despite the increase, it marks a slowdown in annual growth rates—in 2022, spending rose by 9%, from $66,928 in 2021.
From 2021 to 2023, US consumers increased their average annual expenditure by a total of 15.5%, with an average annual growth rate of 8%.
It’s worth noting that the rate of increase in consumer spending in the US in 2023 was slower than the rate of increase in income (before taxes). From 2022 to 2023, the average American income rose by 8.3%, while consumer spending grew by 5.9%.
Average consumer spending: top five expenses
|
Consumer spending category |
Average annual expenditure |
Share of total |
|
1. Housing |
$25,436 |
32.9% |
|
2. Transportation |
$13,174 |
17.0% |
|
3. Food |
$9,985 |
12.9% |
|
4. Personal insurance and pensions |
$9,556 |
12.4% |
|
5. Healthcare |
$6,159 |
8.0% |
Further analysis of US consumers’ spending habits shows that their biggest expenditure is on housing. In 2023, the typical US consumer spent $25,436 on housing, which covered expenses on both owned and rented dwellings and accommodation spent on out-of-town trips. This represented one-third (32.9%) of their average yearly expenses and a 4.7% annual increase.
The second-highest expense for US consumers was transportation. Of the overall expenses in 2023, $13,174, (totaling 17%), was spent on transportation. This included vehicle purchases, gasoline, public transportation, and other related expenses.
The third-biggest expenditure was food. The average US consumer spent $9,985 on food in 2023, which was 6.9% more than they did in 2022. This is followed by personal insurance and pensions and healthcare, on which consumers spent $9,556 and $6,159, respectively.
In total, the top three expenditures of US consumers in 2023, housing, transportation, and food, added up to $48,595—or nearly two-thirds (62.9%) of their average yearly expenses.
Want to learn more?
How Much Does the Average Person Spend per Year? FAQ
How much does the average single person spend?
This is difficult to answer definitively, as spending habits vary greatly from person to person. Factors such as income, lifestyle, and location will all affect spending. According to the Bureau of Labor Statistics, the average single person spends around $77,280 annually on goods and services.
How much does the average person spend a day?
The average person spends about $211.73 per day, according to the Bureau of Labor Statistics. This figure includes spending on housing, food, transportation, entertainment, clothing, healthcare, and other goods and services.
How much does the average person spend on clothes per year?
The average amount spent on clothing per year by the average person varies widely depending on factors such as age, gender, and location. Generally speaking, the average person in the United States spends around $2,041 per year on clothing and related accessories.
What does the average American spend money on?
The average American spends money on housing (including rent/mortgage payments, maintenance, and utilities), transportation (including gas, car payments, and public transportation), food (groceries and dining out), healthcare, and entertainment (movies, sporting events, and recreation).
