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5 Ways Americans Spend Their Money (And How You Can Spend Less)

By: American Heritage08.22.19
A group of friends having dinner together in a restaurant.

Do you ever wonder how your spending habits compare with those of other Americans? Wonder no more. Here are a few of the everyday purchases that account for a large portion of what we spend our money on – along with some tips on how to save money in these key areas and set aside more for the future.


1. Eating Out

This is a big one. According to the most recent Bureau of Labor Statistics (BLS) Consumer Expenditure Survey, the average American household spends about $3,400 a year (about 6% of income) going out to eat. That is close to the amount spent on food that is eaten at home ($4,400), even though most people eat at home far more often, reflecting the high cost of going out to eat.

Is going out to eat worth the added expense? Cutting back on restaurant meals could help you dramatically lower your spending in this category. When you do go out, there are ways you can watch what you spend your money on. Scan the menu for inexpensive options, order water instead of a pricey drink, and take leftovers home to get an extra meal out of the deal.


2. Alcohol

Do you enjoy happy hour get-togethers with coworkers or a glass of wine (or two) with dinner? You are in good company. According to the BLS survey, Americans spend an average of almost $600 a year (about 1% of income) on alcohol. Because many Americans drink rarely or not at all, those who spend money on alcohol may actually spend far more than this average.

Obviously, completely avoiding alcohol is a sure-fire way to stop spending money on it. But cutting back, buying what’s on sale, and inviting friends over for drinks rather than paying top dollar at a bar can help you spend less on alcohol without cutting it out entirely.


3. Coffee

More Americans than ever—almost two-thirds—drink a cup of coffee daily. But that caffeine boost does not come cheap: Research suggests Americans spend, on average, anywhere from $250 to $1,100 a year on coffee.

Here are some ideas on how to save money by reducing your coffee-related spending: Make it at home or at the office and avoid coffee drinks like lattes and blended coffee drinks, which cost much more than a regular old cup of joe.


4. Vacations

We all need a break every so often to unwind and recharge. For many of us that involves traveling. Research suggests Americans spend a lot on vacations: 10–15% or more of our yearly incomes.

Taking a staycation and relaxing at home or exploring local attractions can save a lot of money. Other tips for how to save money while vacationing include comparing flight and hotel prices online to get the best deal, staying with friends, cooking your own meals on vacation, and looking up free or low-cost activities before you go.


5. Pets

We love our furry friends—and we love to spend money on them. It is reported that Americans spent an all-time high of $95.7 billion on our pets in 2019. But anyone whose cat has ever turned a shoebox into a bed or a shoelace into a toy knows that it is often the simplest, least expensive items that make pets the happiest.

So, take a picture of that cute dog outfit or funny-but-easily-destroyed toy and instead, give your pet what they want most – your love and attention. Put the money you would have spent on those items in a savings account to prepare for unexpected pet expenses, like vet bills.



The average American household spends $60,815 a year in total for all expenses, concludes the BLS report. So how does your spending compare?

If you do not have a budget, then you cannot know for sure! Review these budgeting and saving basics from American Heritage for help creating a monthly budget and sticking to it. Then, check out our competitive savings accounts for help strengthening your emergency fund, saving for a down payment on a house, or accomplishing another personal savings goal, faster.



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