We may spend so much time trying to figure out who is an average American, what does he/she looks like and how he/she lives. However, it’s impossible to find the answer for this question because such person doesn’t exist. On the other hand, many of us spend so much time comparing themselves to others (for example, to such average Americans who just do not exist.)
Comparing yourself to the average isn’t useful but Personal Money Service has the reasons why it can be helpful! Follow basic financial tips from our holiday post and make analyzing to draw up a simple financial plan with no difficulties.
Why Looking at the Averages Can Be Helpful?
The basic purpose of the article is to find out the basic trends in consumers’ earning and spending. Analyzing can allow seeing how spending changes with time because this research is made based on age groups. It’s hard to imagine how our financial life may change in the future.
That’s why it can be difficult to make plans! But we can take a look at other Americans and check how their spending behavior changes with time. Thus, we can guess if we will spend more on healthcare and will have to look for ways to save on groceries because food costs will rise in retirement. In any case, such a research opens a door to our financial future at least little bit!
How Much the Average American Earned and Spent in 2014
Let’s take a look at the data provided by the U.S. Census Bureau. According to their research we can see that:
- Those of 25 years old and younger earned $28,500 (yearly after tax income) and spent $32,200
- People between 25 and 34 years old earned $54,600 and spent $49,500
- Consumers between 35 and 44 years old earned $72,500 and spent $62,500
- Those between 45 and 54 years old made $74,300 and spent $65,700
- People between 55 and 64 years old earned $63,700 and spent $56,300
- Consumers between 65 and 74 years old made $47,800 and spent $48,900
- People of 75 years old and older earned $34,100 and spend $36,700
Some numbers are truly shocking. And who knows what data we will have for 2015 but it’s important to notice that all figures represent the mean, rounded to the nearest one hundred dollars. To get the use of this information, pay attention to the trends.
You can see that both earnings and expenses peak between the ages of 35 and 54. Also you can notice that after 65 it’s hard to put away much money, so start saving for retirement as early as possible.
The next step is to pay attention to details. What are our basic expenses? They are housing, transportation, food and healthcare. But as we get older, our living situations change so we start spending more on some of these categories and cut expenses in other areas.
Here are important trends to pay attention to:
- Housing trends dip after the age of 45 and some people end up with getting their own homes, and others understand the difficultly of having fix-rate mortgages while inflation continues to rise.
- Transportation costs rise as the size of the average household grows but fall when children leave their homes and move out.
Many of us believe that retirees spend more of food but it’s not true! The research shows that food expenses drop over 30% in the age from 55 to 75.
It’s not surprising, but healthcare costs continue to rise as you get older and only dip slightly after 75. Be smart and think of how you can get best health insurance quotes today.
How This Data Can Be Useful?
As we know, the cost of living is different in American cities and all the people have personal living situations and conditions. With a help of this data you can try to plan your financial future and foresee which things will cost more for you and which expenses will drop. In any case, financial planning is a helpful thing so try to do that as soon as possible. Maybe it is time you ask yourself these 6 important financial questions,after all?