My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


By Topics

Overall:
0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)



MONTHLY ARCHIVE

Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)



 

Consumer Expenditure Survey

Contributed by mm | December 19, 2003 12:31 PM PST

Department of Labor Consumer Expenditure Survey recently (latest version is 2001 which can be found here; 2003 Survey is in the making) is an eye-opener for understanding how average American spends the money.

I was led to the Survey by the December 15 Fool.com story "Is Your Cash Flow Normal?". Besides some key numbers and facts discussed in the story, here are some more you might find interested:

(Note this is 2001 survey so things may change slightly since then)

Income Level

To get to 20% of the consumer units (e.g. households), before-tax income of $71,898 is needed. For top 40%, it's $44,462. $27,177 gets you to the top 60%. And if you are below $13,909, chances are you are in the bottom quintile of the survey.

The Average

The average consumer unit has a before-tax income of $47,507 and spends $41,395. It has 2.5 persons and 2.0 vehicles. On average there are 1.4 bread earners in each consumer unit. 65% of all consumer units are proud homeowners.

Regional Differences

Northeast consumer units earn the most at $50,568/year before tax, followed by $49,960 in the West, $47,665 in Midwest and $44.218 in the South. However, people in the West spends the most at $43,261 per year, followed by $41,169 in the Northeast, $39,548 in the Midwest and $36,285 in the South. (A lot of the spending differences are driven by housing.)

The Sin Product(s)

In most spending categories, households who earn more spend more. The only anomaly is tobacco: top quintile households spend $310 a year in tobacco on average, while the second and third quintiles spend $382 and $373 respectively. On the other hand, top 20% households spend $700 a year in alcoholic beverages vs $431 for the second 20%. Does it mean alcohol is more sinful than tobacco?

The detailed report also tabulates differences among various age groups, # of persons in the consumer unit (1 person, 2 persons and more), consumer unit composition (husband and wife, with children, one parent, etc.), # of earners and a lot more.

On a side note, I cannot completely agree with the assessment from the Fool.com story that "only 40% of Americans live below their before-tax means" (which means have more after-tax income than expenditures). The conclusion is based on the income-level quintile comparison in the report (page 7), which shows, on average, people in the lowest three quintiles have less before-tax income than expenditures.

The problem is average is average. This line of thinking cannot conclude that everyone in the three lowest quintiles is spending more than earned. Most probably there are a sizable pool of people that can still balance their checking account even with low income. Also, the low income brackets are skewed toward retirees, so the golden rule of LBYM does not generally apply.

Be the First to Comment on this Post


Add Your Comments










Remember personal information?




(It will take a few moments for your comment to be published. Please do not close the window until then.)


Read More ... 76 Posts In The Same Category










This page was last rebuilt at February 09, 2014 08:35 AM PST. (470 Words)
 

RSS FEED





PERSONAL FINANCE BLOGS I READ

Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar






.

Error 500 - Internal server error

Error 500 - Internal server error

An internal server error has occured!
Please try again later.



Copyright 2003-2014, PFBlog.com. All Rights Reserved. (Privacy Policy)