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How We Spend Our Money

If you own a home, it probably won’t surprise you to hear that your spending habits have changed dramatically over the last 25 years. However, you may be surprised to learn that, overall, the total of your expenditures hasn’t changed all that much.

That’s according to a comparison of spending data collected from homeowners by the U.S. Bureau of Labor Statistics’ Consumer Expenditure Survey. The analysis compared homeowner expenditures in major categories between 1986 and 2010. (Note that 1986 dollars were converted to 2010 dollars for comparison purposes.)

According to the analysis, housing remained the largest expenditure for U.S. consumers, rising to about a third of our total spending, followed by transportation (16% of total) and food (12% of total). Not surprisingly, we spent significantly more on healthcare and, in particular, health insurance, which more than doubled in the last 25 years. And, we paid out more of every dollar on personal insurance and pensions (up 24%), gasoline and motor oil (up 15%), and entertainment (up 11%), too.

At the same time, homeowners spent comparatively less on food—whether at home or dining out—which dropped about 15%. We also shifted spending away from apparel and apparel services (down 41%). And, despite the sizeable uptick in spending on gasoline and motor oil, an overall decline in transportation expenses (down 22%) can be attributed to the fact that homeowners purchased fewer cars in 2010 and that fewer owned cars than 25 years ago.

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