How Americans spend their money and how to be wiser

How do the average Americas spend their cash? A more important question: in what ways has this spending change over time?

We can use this data to see how spending patterns changed over time in America. Here is a quick comparison of spending of 1949 vs. 2011.

When comparing 1949 to 2011 it is clear that Americans are paying much more for housing, transportation, recreation, medical care and "other". We have less money for food and clothing than ever before. What can we glean from this? We must look into saving money on housing and transporation costs if we want to be able to save money for the long haul. The benefits of cheaper housing far outweigh the convenience of city living. As an example, my family and I moved to a smaller town. While our apartment is a little smaller than our previous apartment, I spend less time driving to places where I need to go. I am close enough to everything I need that I can walk to my doctors appointments, walk to the local bakery or to the local shops here in town. I am three minutes by car from my son's school and from a large grocery store for times when I need to transport many bags of groceries. We bought electric bikes and can ride all over for appointments or for recreation without having to worry about paying for parking or gas. We purchased our apartment so that we would save money. We used to pay $1,000.00 in rent before sidecosts and utilities and now we pay $455.00 in rent before sidecosts and utilities. The money we pay on our mortgage is not money thrown away because owning in and of itself is considered an investment. If we were to sell our apartment today, it would be worth $30,000.00 more than what we paid for it.
Where did our money go? 1949 vs. 2011 Tables

A thing that really jumps right out here is the relative spending decline on clothes and food. This is mainly the product of giant increases in productivity of manufacturing and agriculture that has made clothes and food much cheaper. This allowed a huge saving on groceries, something that impacts us even today.

There is a jump in spending on homes between 1949 and 2011. We think that it’s definitely worth mentioning that people are renting and buying housing that is much larger. In 2011, the average house was over 2,000 square feet. This was very different in 1950, when the average house was 1,000 square feet or less.

There was also a decent rise in spending on transportation. (Manage your money to be able to afford a car!) This was created by the widespread of cars. In the year 1950, there were only 3 vehicles per every 10 Americans. By the year 2000, that number has risen to 8 vehicles per every 10 Americans.

By analyzing how much the average American spends, you can figure out what to spend money on to be fit it. If you think your groceries take up too much of your monthly expenses, just look at the chart above and see what’s considered normal. Of course each person will be different and the chart just draws from average data. So if you enjoy having an above average grocery bill, go right ahead, buy supermarket sushi every day.

Spending money has never been easier. Most Americans have much too much debt and most are robbing Peter to pay Paul. This revolving credit trend is becoming the norm in every household. Somewhere down the line it will be stopped, either because you make a conscious decision to become more financially responsible or someone cuts up all of your credit cards and while kicking you out of your home. It is important that we all become more frugal. Living on a budget, paying off all debts, saving money and really taking care of, using and appreciating the things we do buy.
Frugal living is easy on the Debit/Credit Card

So next time you ask yourself “What should I spend my money on?” refer back to this chart. Whether it’s food, housing, apparel, transportation, recreation, medical care, and everything else; the data should help you.

Don’t feel guilty about your monthly cell phone bill, tropical vacations, a brand new computer, or an upgraded house. Life is really meant to be enjoyed. Of course you might be able to get the most out of life by living frugally, but you should have those big trips. Learn how rich people spend their money, and mimic that fun, with a budget of course.

List of things to spend money on

A gym membership

Stay fit, be healthy. It’ll only make every aspect of your life even more enjoyable. I bought a decent gym membership and I go every day, it’s something to do. At $50 a month, I am only spending $0.50 per hour of healthy enjoyment.

Your own furniture

Nothing is worse than renting furniture. You look at it and just think about how much money you spend on it each month. Get some quality furniture (or build your own, the frugal way!) and add them to any room to make your house more unique. Add that personalized touch to your home, you won’t regret it.

Education

Education is an awesome investment and if you do it right, you’ll have a great paying job in the end. That’s right; you have to spend money to make money. Go get yourself an education, earn a certificate, and make use of it. Just like you should get a gym membership to work out your body, you should invest in your education to flex your mind.

Your mattress

You spend a surprising amount of time on a mattress during your life. Why not get a good one? It could save you future medical expenses. If you wake up sore every day, chances are you need a new mattress. Keep your body in good health, one of your main focuses in life should be yourself.

Do what you want!

There are plenty of fun things to do without money, not everything needs to come out of your wallet. Try spending the weekend without swiping your plastic card. You can go for a run in the park, take your.

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Our Tips on How to Start Saving Money

how to start saving money

It may be surprising to you but many people do not know how to start saving money. Saving money is simple, but people do not know where to start. This guide is for those who are already saving money with other strategies laid out on this site. Now the question is: how do I save more money?

Saving More Money will Save You In The Long Term!

There are thousands of ways to save more money and in this article we will be illustrating just a few of those ways. If you wish to, you can research even further into other methods. In order to save more cash, all you have to do is spend less… in theory. However, that theory isn’t always that simple. You will need to make sacrifices to reach your goals, but in the end, you’ll be grateful that you made those sacrifices. It’s so much better to have money than not.

You Should Focus on the future

There are many things to look ahead towards in life. A major thing that we see is people wanting to be debt free. This is a huge thing to look forward to in the future. Save more money to make your future more enjoyable. If you only live once, make this life the best that you can.

If you plan on having children, it is super important to budget your money now and have stable finances before introducing a new member into your family. Being financially free and having a new child in your family can be one of the most rewarding things ever.

Retirement is something you should be saving money for as long as you have money. Set aside a certain percentage of your income every paycheck is recommended. If you follow a proper budget planning worksheet this should be simple. Look more into saving money for retirement; you’ll be thanking us later.

Keep your eye on your goal

saving money tipsBefore you set out on saving money, you must identify a goal. What is it that you’re trying to achieve? Without a goal it’ll feel like you’re going through all this effort for nothing. Spend a few minutes and make a list of goals. You can even add onto this list of goals later.

If you need some ideas for goals that may be in your life, think about how you want your life to be. Do you want to be adventurous? Maybe it is time to start saving up for a vacation of your dreams. Do you want to be financially free? How about you start saving money to achieve more. These are just some ideas, there are infinite other reasons to save some dough. You could start a business, buy your kids a present, or even fill your bathtub up with quarters.

So with a goal set, saving money should feel more like a game rather than a task that lags on and on. It should be enjoyable to log your money every day and put aside percentages of your income. Make this into a game! Every time you save money, you’re reaching a new high score. Plus at the end you’re granted with a reward for beating the objective, the goal.

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Spend cash, not plastic.

People with credit cards and other plastic spending devices are most likely to spend more money. They are more likely to make impulse purchases because credit cards feel like pretend money. You’re just swiping your card rather than handing over cash.

To save more money, you must force yourself to feel the pain of spending dollar bills rather than 1’s and 0’s. In addition to being able to associate your money to dollar bills, it is also easier to budget your money using a cash envelop system. You should really head over and check it out if you want to be able to save more money.