It can get expensive to keep the gas tank filled, pay the bills, and decide what to make for dinner.
Those costs and more add up over a year, especially for lower-income Americans. The Bureau of Labor Statistics publishes annual consumer expenditures data, with the most recent estimates capturing spending in 2024.
Households earning the highest 20% of income before taxes made $264,510 on average, while the lowest-income quintile made $16,658 on average before taxes.
In 2024, the top 20% of households spent about three times as much on housing costs as the lowest 20% did, about 38 times as much on personal insurance and pensions, and about five times as much on transportation. You can click the categories within the following chart to see some average spending estimates.
High-income households spent a lot more on average on housing expenses, but at a lower share of their overall spending than the lowest 20%. The lowest-income households allocated slightly more of their spending to food and healthcare. You can click the categories near the top in the following chart to see some estimates.
The strength of higher earners could take a hit
The US has been in a K-shaped economy, where higher earners are doing better than others, and supporting consumer spending.
Lower-income Americans have experienced wage growth slowing drastically from the 2022 peak, and some are modifying their budgets. A survey from the Consumer Finance Institute at the Federal Reserve Bank of Philadelphia in October found that lower-income Americans earning less than $40,000 were more likely to consciously pull back on their spending than those making at least $150,000.
Around 28% of those making less than $40,000 reported changes in their circumstances, like employment or household size, as the main driver of how they were approaching their spending, a higher share than other income ranges. Just under half of low-income respondents said the change in costs of goods and services was affecting their approach.
The frozen job market, where job gains are not broad-based, is affecting all kinds of job seekers, but could be disproportionately affecting lower-income Americans.
“As we entered 2026, slowing job and wage growth, combined with the accumulated impact of a few consecutive years of rising cost of living was already weighing on lower income consumers,” Atsi Sheth, chief credit officer at Moody’s Ratings, said in a statement. “Now, the impact of the Middle East conflict on energy and food prices could further erode purchasing power for this segment, and result in cutbacks in discretionary spending like travel and entertainment.”
Mark Hamrick, senior economic analyst at Bankrate, told Business Insider in early March that the oil shock could mean lower- and middle-income households allocate more money to gas. AAA data shows the national average Monday was about $4, up from about $3 a month ago.
High-income households aren’t immune to economic headwinds.
“Higher income households had thus far been resilient, partly due to buoyant financial asset price growth,” Sheth said. “However, should financial market wobbles affect sentiment, even if high income household spending continues to grow, its pace could slow.”
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