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American households spent an average of $539 on bakery products and $131 on postage and stationery in 2024. Those are a few of the quirkier spending habits tracked and categorized in the Consumer Expenditure Surveys, a nationwide survey of more than 30,000 people. The federal government has conducted detailed expenditure surveys since 1888.
The Bureau of Labor Statistics releases this data, which includes spending details on hundreds of items for different generations, in one-year batches. While it may seem outdated by the time it’s released — particularly last year, when the 2024 data release was delayed until December due to the federal government shutdown — the tradeoff is specificity: We can put the spending patterns of specific groups of Americans under a magnifying glass.
Overall spending trends, by generation
The average dollar amount spent isn’t the best way to understand this data. Varying incomes can distort the meaning behind raw dollar amounts. For example, a younger household may spend a smaller dollar amount at restaurants than an older household, but if the younger household has a lower income, they may still be devoting a larger percentage of their income to eating out.
Instead, comparing the share of spending to the average income for each demographic reveals how much income each expense category eats up. Income reported in this survey is pre-tax.
Housing, transportation and food make up the core of American budgets. These three expenses used, on average, 48% of a household’s income in 2024. (The BLS measures spending by household, or what they call a “consumer unit.” That term includes families and other groups who pool their income and expenditure decisions. Roommates, on the other hand, are distinct consumer units.)
Core spending takes up the greatest share of income for the youngest and oldest generations.
That trend can be explained, in part, due to changes in income. Peak earning occurs in middle age. Even if the dollar value of household spending goes up as someone approaches middle age, the increase in household income, on average, outpaces the increase in spending.
Once workers retire, income generally falls. Core expenses as a share of income rises, even if the dollar value of spending doesn’t change.
Deeper dive: housing spending by generation
Housing eats up a bigger share of income than any other spending category — 25.2%.
Following the trend seen in overall core spending, housing costs are high for Gen Z (30.8% of income) and drop for Millennials (24.5% of income), before bottoming out with higher-earning Gen Xers (21.6% of income).
Despite a lower average income for baby boomers, they’ve managed to keep mortgage, rent and taxes as a share of income at a level comparable to Gen X (9.9% of income and 9.7%, respectively), the generation with the smallest share of income devoted to those expenses. A rising level of paid-off mortgages for baby boomers may contribute to that trend. About 54% of homeowners over 65 didn’t have a mortgage in 2024 compared to 19% of homeowners between 45 and 54, according to the Bureau of Labor Statistics.
But the survey’s housing category encompasses a broad range of expenses related to owning and maintaining a home, not just rent and mortgage payments. And the share of income devoted to those housing-related expenses, such as maintenance and utilities, is highest for the two oldest generations — baby boomers and the silent generation. Their lower average income explains much of that increase.
In sum, shedding a mortgage makes a difference, but it doesn’t eliminate all housing spending in retirement.
Deeper dive: transportation
If you currently have a car payment, it might seem like that’s the biggest slice of transportation spending. And it might be — while you have that payment.
But on average, less than half of transportation dollars go toward vehicle purchases.
After a car is paid off, people continue to spend on fuel, insurance and maintenance. Comparing periodic purchases (replacing a car every 10 years) with ongoing expenses can be difficult on an individual basis. But, when viewed from a populationwide perspective, it’s easier to see: Ongoing transportation costs, not car payments, are the bigger driver of transportation spending.
Medical spending: an unwelcome retirement crasher
Housing, food and transportation are core spending categories across all generations.
Other categories may be equally important, but not universally relevant across all age groups — for instance, childcare.
While the cost of raising children can be significant, these expenses often align with increasing incomes, helping to balance the financial burden.
On the other hand, medical expenses present a different challenge. While the decline in income during retirement can partially explain the rising share of income allocated to various costs, it fails to fully capture the impact of healthcare expenses on retirees.
Individuals may spend years adjusting to healthcare costs, using less than 5% of their income, only to find themselves spending more on healthcare than on food in retirement. Unlike regular expenses like food, unexpected healthcare costs can catch even the most diligent budgeters off guard. Therefore, planning for unfamiliar medical expenses should be a crucial aspect of retirement planning.
If you are a member of the media seeking further insights on the data or wishing to delve deeper into the implications for consumers, please reach out to [email protected].
Author: Kurt Woock
Kurt Woock began writing for BW in 2021. Previously, he worked as a writer and educator for Colorado PERA, a retirement system for public employees, and as a legislative editor for the Colorado General Assembly. Kurt holds a B.A. from Valparaiso University and an M.A. in journalism from the University of Missouri-Columbia. He currently resides in Chicago.
