Personal Finance

Average Consumer Spends 42% on Income on Household Bills

When Americans bring home their paychecks, how much of that money is immediately spoken for? That’s exactly what a new report from Doxo shows.

The data shows that the average household in the United States spends a total of $29,459 per year on household bills. This amounts to 42% of their income.

According to the report, Americans spend a total of $3.87 billion per year on household bills. Of that, $3.22 trillion can be classified in one of 10 top categories. At the head of that list is mortgage payments, totaling $832 billion per year followed by $699 billion in rent. On a per-household basis, this puts the average mortgage payment at $1,321 with average rent coming in at $1,191. Auto loans ($544 billion total/$467 average), utilities ($436 billion total/$351 average), and auto insurance ($267 billion total/$207 average) rounded out the top five. Other categories in the top 10 were mobile phone payments, cable/internet, health insurance, life insurance, and alarm/security expenses.

Looking more closely at spending in these categories, the report also determined where the states with the highest averages. In the case of mortgages (not surprisingly) California topped the list along with New Jersey, Hawaii, Massachusetts, and New York. All five were also represented on the list of top average rent.

On the opposite end, West Virginia had the lowest average mortgage at $879 and the lowest average rent at $785. Elsewhere, Wyoming and North Dakota were tied for the highest average auto loan payments ($545) while Pennysvalnia ($400) had the lowest average. Lastly, the combined total of electric, gas, water/sewer, and waste/ recycling utilities saw Hawaii top the list with a $633 average. Mississippi’s $255 average was the lowest in the country.

Commenting on the study’s results, Doxo’s Senior Director of INSIGHTS Liz Powell stated, “With record-breaking inflation rates, continued concerns of a recession, and nearly two-thirds of working Americans living paycheck to paycheck, economic transparency has never been more critical.”

Additionally, speaking to Doxo’s goals, Powell noted, “Alongside our app that simplifies the task of staying on top of bills to help improve financial health, these reports support Doxo’s ongoing mission to empower our consumer users, billers, and financial institutions alike to make better decisions.”

There are several factors that can impact how much of their paychecks consumers are able to retain. Of course, as of late, inflation has been near the top of that list as the cost of living has risen in several cities across the country. Unfortunately, on average, wages have failed to keep up with that. Therefore, while Doxo’s data show that 42% of income goes to essential bills now, it will be interesting to see if that figure climbs higher in subsequent years.

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