How Much Money Do The Us Spend On The Military – With consumer spending accounting for 70% of US GDP, it’s obvious that Americans love shopping. Spending habits always follow a pattern that repeats across different groups of consumers, but is also contextual. It tells us more about what consumers want and are used to.
In our overview of the latest statistics on American spending habits, we present some revealing information. Let’s dive in to find out more about how both individuals and households are spending money, their changing habits during the pandemic, and what millennials are spending their money on.
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How Much Money Do The Us Spend On The Military
This translates to approximately $5,111 per month. Moreover, average annual spending in America has seen a steady increase since 2017. From 2017 to 2020, spending increased by 2.1%.
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However, it is worth noting that personal income grew much faster. In the same period, income ratios increased by 14.7% (annual growth of 4.7%). This can be explained by the fact that more and more citizens decide to allocate surplus income.
The average cost of living best reflects the average annual expenditure of a single consumer. Today, that number is higher than ever. The cost of living in the US has increased significantly over the past 20 years, with the only signs of a decline seen in the recession years of 2008 and 2009.
Overall, consumer habits caused $1.45 trillion to be spent in 2020. This number has not changed over the years. In the second quarter of 2021, consumer spending accounted for 69% of the economy.
With an average spend of $21,409, Americans spend the most on housing. The next category is transportation with $9,826, followed by food ($7,316) and personal insurance and pension ($7,246).
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In 2020, the median rent for an unfurnished apartment was only $841. As of 2018, that number had reached $1,588. When it comes to rent rates by state, it’s clear that a higher median income means a higher rent price. For example, West Virginia residents typically pay $866 in rent, while California residents are most likely to pay $2,542.
Annual food spending has been steadily increasing over the past 20 years. In 2000, the average household spent $5,158, an increase in current spending of 29.4%.
Visual Capitalist has analyzed the buying habits of American consumers over the past 75 years and has come to some interesting conclusions. Food spending has undergone some changes. Historical statistics of American consumerism show that Americans spent about $8,311 a year on food, compared to $6,759 today.
The reason for this is not that food was cheaper (as you can see today it is cheaper), but other spending sectors have increased significantly, especially housing, transport and healthcare.
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The average American household has 2.5 people and $73,574 in total income. Its members spend $53,708 and save $9,898. Most of the expenses are for housing ($11,896), utilities ($2,480), and vehicles ($4,054). The average household spends the least of its income on gifts and charity – $1,873 a year.
Spending habits by income reveals that the household in the bottom 20% has an annual income of $25,525. The salary is only a small part of that – $3,663. These households depend on Social Security income ($5,871) and income from loans and past savings ($13,590). The figures show that these households also spend the most on housing, utilities and vehicles.
The spending habits of Americans from higher-income households differ from the spending and saving habits of lower-income households. Logically, the less money you have, the less money you can save. The top 20% of earners save nearly half of their income on housing, vehicles, fuel, insurance and entertainment.
Although they make up 13.4% of the U.S. population, black households are significantly under-represented in total national spending on goods and services. Moreover, the spending habits of African Americans show that black households earn less and have less purchasing power. That’s why many companies avoid investing in marketing to black consumers.
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However, according to experts at McKinsey, they may miss the opportunity to generate an additional $300 billion in annual revenue with the right strategy to reach black households.
Statistics of American spending habits by race suggest that black households generate $835 billion in total consumer spending annually. It also involves spending on loans and debt service, as black people are 50% more likely to have student or medical debt. However, looking at growth rates over the past two decades, black households have had an annual spending growth rate of 5%.
White households kept their growth rate steady at 3%, but that pace was mainly due to population growth rather than an increase in real spending.
Mint, a personal finance management app, shared its data on users’ spending habits to reveal how the 2020 pandemic affected their financial behavior compared to 2019. The biggest increase in spending was for investments (41, 91%), caring for pets (23.13%) and education (17.02%).
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On the other hand, customer spending behavior in 2020 revealed that Americans spent 29.74% less on financial services (advisers, life insurance, etc.), 23.92% on bills and utilities, and 22.5% on entertainment .
With limited spending, many American consumers have been able to save much more money than usual. Along with increased spending on home improvements and investments, saving habits have also yielded positive results.
Moreover, US 2021 spending habits suggest that savings in the first two quarters reflect similar dynamics. This is encouraging news for the industry. Experts note that greater savings are likely to help the market recover quickly as the pandemic slows down.
Due to the reduced opening hours of restaurants and bars in 2020, spending on alcohol also decreased. The Job Center distinguishes between spending on alcohol away from home and at home. Out-of-home spending has been impacted by the pandemic, down 43.9%. Surprisingly, spending on alcohol at home increased by only 4.5%.
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As with alcohol, the food industry has also been affected by changes in US spending habits in 2020. Overall, food spending fell by 10.4%, but the decline was particularly notable for out-of-home food spending, which fell by 10.4%. 32.6%.
The largest decrease was recorded in three-person households – 37.3%. On the other hand, spending on food at home increased by 6.4%.
US spending statistics show that consumers have had to reduce their outdoor activities due to lockdowns and restrictions, and the number of people staying at home has increased. Unsurprisingly, spending on reading was almost a quarter higher compared to 2019. The data on the average time spent reading confirms this figure, with over 15s spending 4 minutes more per day reading than in 2019.
Overall, this figure is the result of two major changes. Entrance fees and tickets (mostly cinema and concert tickets) fell by an incredible 51.7%, while spending on entertainment, equipment and services increased by 48.8%. These figures show that entertainment is an important aspect of consumers’ daily lives as they quickly found a substitute for staying at home for live events.
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As movies and concerts fully return to our lives, check out opportunities to get free theater tickets.
The 2020 U.S. consumer spending statistics show that 67% of consumers received a stimulus check to help cover the unexpected costs of losing a job, higher rent, and so on. What’s more, of those who received the check, 34% used it for groceries and 29% for savings.
While US spending statistics show that goods spending during the pandemic weathered the economic downturn relatively easily, the service industry was not so lucky. But as the pandemic slows thanks to vaccination rates and less restrictions, the industry is recovering.
For example, in April 2021, there was a 19.3% increase in service spending. However, it will be some time before spending figures return to pre-February 2020 levels.
How Americans Make And Spend Their Money, By Income Group
American spending habits during the pandemic show that the pandemic is putting financial decisions and habits to the test. More than half of Americans have given serious thought to how they spend their money. Two in five Americans say they had severe financial difficulties in 2020, causing 75% of them to reassess their long-term budgets.
Although online shopping rates were increasing even before the pandemic, many consumers who did not shop online changed their habits during several lockdowns.
US consumption data shows that online shopping has increased across all shopping categories, with OTC drugs (44%), groceries (41%), household goods (38%) and personal care products (38%). Following this increase, online shopping will increase by up to 30% compared to pre-pandemic rates.
Millennials make up the largest portion of the US population (over $72 million). Spending around $600 billion a year, they are the backbone of the US economy.
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However, marketing attention is slowly shifting towards Generation Z, who currently spend around $140 billion a year. Most of this population has still not completed their education but will soon have considerable purchasing power.
Consumer spending demographics tell us more about millennials’ shopping habits. Of the total earned income, they spend about $47,256, which means the rest
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