Wednesday , 13 December 2017


How the Poor, Middle Class and Rich Spend Their Money

How do Americans spend their money and how do budgets change across the income spectrum? The graph below answers these questions. Words: 240

So say Jacob Goldstein and Lam Vo (www.npr.org) in edited excerpts from their original article*.

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

The article goes on to say, in part:

The graph below shows average household spending patterns for U.S. households in three income categories — one just below the poverty line, one at the middle of the income distribution and one at the top of the distribution – and both the similarities and the differences are striking.

How The Poor, The Middle Class And The Rich Spend Their Money

Source: Bureau of Labor Statistics; Credit: Lam Thuy Vo / NPR

Everyone devotes a huge chunk of their budget to housing, clothing and shoes, and on food outside the home but poor families spend a much larger share of their budget on basic necessities such as food at home, utilities and health care.

Rich families are able to devote a much bigger chunk of their spending to education, and a much, much bigger share to saving for retirement. (The retirement line includes contributions to Social Security and to private retirement plans, by the way.)

*http://www.npr.org/blogs/money/2012/08/01/157664524/how-the-poor-the-middle-class-and-the-rich-spend-their-money (The figures in the graph come from the Consumer Expenditure Survey, which has tons of data on spending patterns in the U.S. For a historic look at spending in America, see our post What America Buys. For more, see our Graphing America series.)

Other Personal Finance Articles:

1. Calculate Your Portfolio’s Expected Return & Time Needed to Double + Loan Interest & Time to Pay Off – Here’s How

Math class seemed pointless back in the day, but it turns out all those confusing equations are quite useful….We’ve rounded up 11 math equations that can be used every single day. Write them down, whip out your pencil, and prepare to budget like a genius.

2. How Does Your Financial Advisor Measure Up to These 20 Criteria?

Below is a summary of the criteria I would want to find in an Investment Advisor. It is a demanding “wish list” so if you know of such an individual please let me know. Words: 640

3. What, and How Much, Should You Tell Children About Family Finances?

We’ve all been told that politics and religion are the most sensitive conversational topics, but if the recent T. Rowe Price 2012 Parents, Kids, and Money Survey study is any indication, perhaps we should add family finances to the list. According to the study, a shocking percentage of parents are routinely deceiving their children about money or, in some cases, failing to instill basic financial skills. Are you acting as a sound financial model to your children? Learn more from the informative infographic below.

4. Taxes on “Rich” Vary Dramatically by Country – Take a Look

There is a lot of debate these days about the extent at which the “rich” among us should be taxed. That is an argument that no one is going to win but the findings of a study comparing the tax rates of such individuals on a comparative basis by country is most enlightening. Take a look to see how your country’s tax rates on the “rich” compare with other countries. Some of you will read this article and be quite displeased while the majority of you should realize that you have nothing to complain about (relatively speaking, that is). Words: 455

5. The True Cost of Car Ownership is….OUCH!

We all know that the true cost of a car doesn’t end at it’s purchase price but most people don’t really know what the annual cost will actually amount to. The next time you are shopping for a car consider these additional costs.

6. In Debt? Kick it to the Curb, Get Rich, and Start Living Life to the Fullest! Here’s How

If you’re among those struggling with debt and just want to be rid of it and move on with your life, it can be helpful to find some information and inspiration from others who are financial experts or people working to pay off substantial amounts of debt. You’ll find all of that, and more, in these inspirational personal finance blogs that can offer you advice, motivation, and guidance in paying down your debts so you can start putting that money to other uses. Words: 1010