The Consumer Expenditures 2023 report was recently released from the U.S. Bureau of Labor Statistics and gives some insight into how people are spending their money in U.S. households. Consumer spending is up 5.9% from 2022 to 2023. Housing (32.9%), transportation (17%), and food (12.9%) cover the majority of total expenditures of U.S. households. When creating a spending plan, decide how many categories you are comfortable with managing and how detailed you want to be to keep track of your household expenses. 

Whether you are new to setting up a spending plan or need a fresh start, consider using some of the household categories from the report, which are housing, transportation, food, personal insurance and retirement, healthcare, entertainment, apparel and services, education, cash contributions, and other expenditures. There are a lot of categories. You may want a more straightforward list that could be just housing, transportation, food, entertainment, and a few others that meet your needs. As not all expenses easily fit into a basic category, having a catch-all or other category can be helpful to make sure you track every expense, including those occasional expenses. A spending plan can be very detailed or broad if it can capture your view of personal expenses. 

Tracking expenses at regular intervals can help you stay within your spending plan. You may want to consider tracking expenses based on how frequently you receive a paycheck, whether that is weekly, monthly, or bi-monthly. Find a method that works for your situation and that helps you to create a consistent habit. The basic pencil and paper method can be used for those who prefer a hands-on approach. Otherwise, many apps, websites, and banks offer electronic methods for tracking your spending. 

Once you start tracking your spending, schedule time to review where you spent your money. Compare your expenditures with the household averages to see if you spend similarly or differently and what changes you think would improve your financial well-being. For example, if you are spending more than you prefer on food, you can work toward changes in how you spend on food as discussed in a previous article, Focusing on food costs. Reflect on whether you are happy with the spending choices or if you think making different decisions would better support your personal values going forward. Create a spending plan that fits your financial situation and needs with the tracking categories and methods that work for you.   

References

Mahlandt, J. (2024, February 14). Focusing on food costs. Finding Financial Balance - University of Illinois Extension. 

U.S. Department of Labor. (2024, September 25). Consumer expenditures - 2023. Bureau of Labor Statistics.