How We Spend All That Money

Where does our money go? Consumers are asking themselves that question with greater urgency these days as they seek to balance their household budgets. As it happens, the Bureau of Labor Statistics has been keeping track for them, at least in the aggregate. A report released last month goes into elaborate detail about how Americans spent their money during 2007.

The average household spent $49,638 last year, with the biggest share — 34.1 percent — going for housing. Under that heading, the subcategory of “shelter” accounted for 20.2 percent (including 7.8 percent for “mortgage interest and charges”). “Utilities, fuels and public services” took another 7 percent, while “household furnishings and equipment” took 3.6 percent — including just 0.5 percent for “major appliances.”

Transportation expenses — for everything from vehicle purchases to subway tokens — accounted for the next-biggest share, at 17.6 percent. Considering the nationwide wailing when gas prices climb, you’d think this subcategory was a vast segment of the typical American’s budget. In fact, the slightly broader classification of “gasoline and motor oil” accounted for 4.8 percent of all spending.

Food ate up 12.4 percent of the average household’s spending last year, with “food at home” accounting for just a little more than “food away from home” (7 percent vs. 5.4 percent). The broad category of “meat, poultry, fish and eggs” accounted for $777 of the average household’s food-at-home spending; fruits and vegetables took $600; cereals and bakery products took $460, and dairy products $387. Going into more detail on that topic, the report shows expenditures on beef ($216 for the average household) exceeded those for pork ($150) or poultry ($142). More money went for fresh fruits than for the processed ilk ($202 vs. $112) and for fresh than processed vegetables ($190 vs. $96).

The one other category taking a double-digit percentage of household expenditures was “personal insurance and pensions” (10.8 percent) — some of which isn’t an expenditure in the conventional sense, though it’s counted that way in the report.

One pairing of data that might surprise you: Healthcare took just a slightly bigger share of the average household’s spending than did entertainment (5.7 percent vs. 5.4 percent). Maybe the presidential candidates should have proposed a federal program to subsidize voters’ purchases of movie tickets. Reading, which apparently isn’t classified as entertainment, barely registered in the report, taking 0.2 percent of the average household’s spending. It’s a measure of how inexpensive clothing can be (unless you have fancy taste) that the “apparel and services” category took a mere 3.8 percent of spending.

The report indicates that few people can hope to set their finances in order by dispensing with some favorite vices: Alcoholic beverages accounted for 0.9 percent of the average household’s spending and tobacco products and smoking supplies for 0.7 percent. Indeed, people could save more by shunning the virtue of charity: 3.7 percent of spending went to “cash contributions.”