Typical Percentages for Household Budgets

Start the budgeting process by tracking all of your expenses for a few weeks.

Start the budgeting process by tracking all of your expenses for a few weeks.

If you have ever found yourself days away from payday wondering where your money has gone, it just might be time for you to set up a household budget and stick to it. FDIC Community Affairs Specialist Paul Horwitz states, “It isn’t how much you make that’s important, it’s how much you keep.”


Housing costs normally take the biggest bite out of your budget. The Bureau of Labor Statistics’ annual report on consumer expenditures showed that 34 percent of Americans’ spending goes towards housing costs. Roughly 60 percent of the average housing expense covers mortgage or rent costs, real estate taxes and homeowner’s insurance, while the rest goes towards utilities, furnishings and maintaining the home. Potential lenders use this budget line item to determine how much mortgage you can qualify for. BankRate.com states that potential lenders limit your basic housing expense, including mortgage payment, real estate taxes and homeowner’s insurance, to 28 percent of gross annual income.


Transportation is normally the second-largest expense in a household budget, although this amount can vary quite a bit depending on your personal situation. The BLS report shows that the average American two-car household’s transportation expense accounts for over 17 percent of the overall budget. This expense may run as low as 10 percent or as high as 20 percent if you work from a home-based office, live in a metro-center with public transportation or have a long working commute.


A big chunk of most household budgets goes towards food. Although budgeting 15 to 20 percent of your expenditures towards food is acceptable, food spending for most Americans is closer to 13 percent of their overall expenditures. At-home food consumption accounts for almost 60 percent of all food spending, while Starbucks and the local cafe eat up the remaining 40 percent.

Savings, Insurance and Health Care

Life insurance, health care expenses, retirement savings, personal savings and cash contributions can take a toll on your budget, but they are the most important line items in your budget. Life insurance and retirement amounts to over 10 percent of the average household budget, health care comes in at roughly 6 percent and cash contributions almost 4 percent. Although Americans sometimes falter when it comes to personal savings, you should budget 5 to 10 percent of your budget towards it. Debt specialists Care One recommends taking a “pay yourself first” attitude when it comes towards savings to be sure you have enough reserves built up in case the unforeseen happens.

Personal Expenses

According to the BLS, roughly 16 percent of the average American’s spending goes towards clothing, personal services, education, reading, entertainment, tobacco, alcoholic beverages and other miscellaneous expenses. Be careful when calculating your entertainment expenses to not include meals eaten away from home, as they should be incorporated into your food budget.


About the Author

After attending Fairfield University, Hannah Wickford spent more than 15 years in market research and marketing in the consumer packaged goods industry. In 2003 she decided to shift careers and now maintains three successful food-related blogs and writes online articles, website copy and newsletters for multiple clients.

Photo Credits

  • to have money to burn image by Andrey Andreev from Fotolia.com