How The Average American Spends Their Paycheck

Hi guys, this is a guest post by the folks at creditloan.com. The post provides a pictorial view of the uses of funds (from paychecks) of the average American family. I hope you enjoy

The company will release the paycheck this week, but after computing how much extra money you get to spend minus your regular expenses, you realize that there will be nothing left. It can be very hard to manage your budget, especially when you have a family or when you have dependents.

However, it doesn’t mean that it’s impossible to set aside some of your earnings for future needs or other expenses. It matters to gain a good perspective of how to spend your money and what specific things you need to focus on, so you can create a sound financial plan.

To help you create your budget, we’ll share about how much other Americans earn and how much they spend, and what are the things they use their money on. You can get more ideas on how to shift your budget and find alternative options by observing the given numbers.

For clearer explanation, we came up with an infographic that highlights the things you need to consider like the annual earnings before taxes, and then the average expenditure. Try and discover if you earn more than the average American. Also, try to check if you spend more than the average Americans.

Some key details like the specific amount of money spent on housing, healthcare, entertainment, food, education and personal insurance are present there too. These numbers can help you learn how much is normally spent in the U.S. based on a certain salary bracket. You can also use these numbers to see if you can adjust your budget to save for your additional needs.

 

Gemanalyst review of how Americans spend their paycheck

From the details in the above infograph, a little calculation will see a payment of c.US$7800 as tax that leaves an average of US$58,810 as disposable income. With an average expenditure of US$55,978, the average american family is left with only US$2832 to save in a whole year.

In my opinion, this is not acceptable, and the average American family should sit down to analyze their spending then take out unnecessary costs. For example, entertainment cost in my opinion is unnecessary and can be reduced. Personal Insurance is acceptable though if it is a life insurance as the dependents of the insured will be able to access benefits from the insurance company if god forbid the insured dies.

Other cost elements that can be shaved in my opinion are apparel and services and all other expenditures. To fully determine if the other expenditure elements can be shaved, we need to ascertain which part of it is unnecessary and which part is necessary. It is only upon that we can make a fully informed decision on if spending on other expenditures should be trimmed to a certain figure.

So guys that is it, i hope you enjoyed the post. Also, please remember that it is important to save and invest in risk free securities such as treasury bills etc. If you notice that it is becoming increasingly difficult to save, please have a sit down with your partner and decide on unnecessary costs to shave off.

Thanks for your time guys, cheers!