Clients often ask my opinion about their spending habits during the financial planning process. They want to know if their spending is "normal" or how it compares to others. Though everyone is different it's helpful to look at the averages.
Click here to see a chart from Visual Economics showing national and regional household spending averages for housing, transportation, food, healthcare, entertainment, etc....the results may surprise you. (When the chart opens you may have to click it again to see it in full size. Your browser may automatically resize it to fit the page, making it impossible to read.)
Once you categorize and add up all your expenses there are a few questions you can ask yourself:
- How does my spending compare to averages...am I far out of whack in any areas?
- Is this intentional...do these expenses align with my personal values and my life's mission?
- Is this rational...does it make sense to spend this amount in this area?
Understanding where your money is going today and deciding how you want to use it in the future is one of the first steps in gaining confidence in your financial future.