How much money is enough to live comfortably these days? According to Cheat Sheet, If you’re like most Americans, the answer is simply “more”.
New data from the Social Security Administration (SSA) reveals Americans made more money than the prior year, but the majority of the country is still below average on the pay scale.
Perhaps the most sobering finding from the SSA is that 51% of all American workers made less than $30,000 and 38% made less than $20,000 in 2014. No matter how much money you make, it never feels like enough. Let’s take a look at five major categories that account for the majority of what Americans spend all their money on.
- Taxes
Uncle Sam is the most stringent bill collector in the land. Taxpayers paid a total of $3.25 trillion in federal taxes for fiscal year 2015, according to the recent Monthly Treasury Statement. Individual income taxes accounted for nearly half of the total at $1.54 trillion. Social Security and other payroll taxes contributed $1.07 trillion, while corporate income taxes and other taxes added a mere $344 billion and $299 billion, respectively.
- Housing
Whether you rent or own, the roof over your head is a major source of budget headaches. The nation’s top 25 metros for rent hikes are experiencing double-digit year-over-year gains, according to RentRange. However, renters looking to lock-in a portion of their housing costs with a mortgage also face an uphill battle.
The price of homeownership continues to rebound from the depths of the Great Recession and then some. According to the National Association of Realtors, the median existing-home price for all housing types hit $221,900, 6.1% higher than a year earlier and the 43rd consecutive month of year-over-year gains. Of course, the advertised price of the American Dream is only the beginning. Homeownership comes attached to property taxes, home insurance, higher utility bills, and never-ending maintenance. In total, Zillow estimates these hidden expenses average $9,477 per year
- Transportation
Nothing tells the world you know how to spend money like driving around on a fancy set of wheels. Americans love their cars. On average, consumers financed $28,524 for a new vehicle
and $18,671 for used. However, much like with homeownership, the purchase price isn’t the only hit to the budget. A recent analysis from Bankrate finds the average driver spends $2,223 on gasoline, insurance, and repairs each year.
- Food
The average American household spent $6,759 on food with $2,787 of that total on food away from home. In fact, one survey finds we spend an average of $1,200 on fast food every year. From celebrating a special occasion to simply taking a break from cooking at home, people enjoy eating out. Nonetheless, that doesn’t mean you should let food costs ruin your budget. A recent survey finds food costs are the most common area where Americans break the budget. A separate research shows 76% of American households throw away leftovers at least once a month, while 53% do so every week. Government figures estimate households waste roughly $900 a year in food.
- Health care
Health care expenditures totaled $4,290 for the average consumer unit in 2014, with $2,868 of that coming from insurance expenses. Making matters worse, health care expenses tend to rise every year for a significant amount of Americans, sometimes by double-digits. Health truly equals wealth during retirement. Fidelity estimates a couple, both aged 65 and retiring this year, can expect to spend roughly $245,000 on health care throughout retirement.Nursing home and long term care expenses are not included in the estimate