A List of Household Expenses (and Ways To Save)

What to know about household expenses and how to save

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Many homeowners have learned hard lessons on how household expenses can quickly add up. You may, for example, have overspent on food, utilities, or entertainment and derailed your budget. When you estimate all your monthly expenses correctly and keep spending in check, you can create a successful budget to help you stay in good financial health.

If you struggle with general overspending, consider trying the envelope system, Cameron Church, a certified financial planner (CFP) at Sound Foundation Wealth Advisors, told The Balance in an email.

With this strategy, you put your cash in different envelopes that are labeled with budgeting categories such as "restaurant meals" or "new clothing." When the envelope is empty, you can’t spend on that category anymore. You then refill your envelopes the next month or pay period.

The average U.S. household expenditures added up to $61,334 in 2020, according to the U.S. Bureau of Labor Statistics. Learn about common household expenses and ways to cut back on them.

Key Takeaways

  • Common household expenses include mortgage payments, transportation, food, health care, and child care costs.
  • You can create a budget to cut down on expenses and reduce impulse buying and overspending.
  • Eating out at restaurants less can help significantly reduce your food costs.
  • Carpooling can help you save money on transportation costs.

Housing Expenses

Housing expenses are the costs of owning your home. Common housing expenses include your monthly mortgage payment or rent, property taxes, utilities, furnishings, maintenance, and repairs.

Average Costs

The average American spent $21,409 on housing costs in 2020, according to the U.S. Bureau of Labor Statistics, up 3.5% from the year prior.


Housing expenses on owned homes increased 9% during that time because of spending increases in mortgage interest and charges, which were up 7.3%, property taxes (up 9%), and maintenance, repairs, insurance, and other costs (up 14.8%).

Tips for Saving

If you need to lower your monthly mortgage payment, consider refinancing with new terms. Keep in mind that extending your loan term may reduce your monthly payment, but you could pay more in interest in the long term.

You can save on utilities by making small changes; for example, turning your thermostat a few degrees higher in the summer or lower in the winter, changing your air filters regularly, and using energy-efficient appliances. Simply lowering your thermostat 7 degrees for eight hours a day can save 10% on your energy bill.

Car and Travel Expenses

Transportation costs are what you spend on your vehicle or traveling. They include monthly car loan payments, gas, insurance, maintenance, and repairs. They can also include public transportation costs, airfare, or services such as Uber or Lyft.

Average Costs

The average American spent $9,825 on transportation costs in 2020, which was down 8.5% from 2019, according to the U.S. Bureau of Labor and Statistics. While spending on new cars increased 2.9%, spending on fuel declined 25%, and spending on public transportation declined 66% during this pandemic period.

Tips for Saving

You can save on car and travel expenses in a number of ways, depending on your mode of transportation. If you commute to work in your car, consider carpooling to save money on gas or using public transportation to reduce your repair bills. If you use a ride-sharing service, you can also use its carpooling feature for a lower rate.


Shop around for car insurance rates to make sure you are getting the best deal and not overspending. Take advantage of discounts for having a good driving record or for bundling your car insurance with other products from the same company.

Food Expenses

Food costs are the money you spend on eating at restaurants and buying groceries. It also includes food or beverages you buy at convenience stores, takeout, or school lunches for children. Food expenses are a necessity, but there are ways you can cut back.

Average Costs

The average American spent $7,316 annually on food costs in 2020, down 10.4% from 2019, a decline likely related to lower spending in restaurants due to the pandemic. According to the USDA, Americans spent 8.6% of their disposable personal income on food in 2020.

Tips for Saving

Food costs are a significant expense for most families, and costs so far in 2022 have continued to increase along with inflation trends. Consider minimizing trips to the grocery store and going only once a week to reduce impulse buying.

“The more trips to the grocery store you make, the more opportunity there is to spend,” Church said. By planning out your meals and knowing what ingredients you’ll need, you can buy what you need in one trip. This preparation will save you from last-minute grocery trips or from eating out.

Another key way to reduce your food costs is to minimize eating at restaurants.

The Cost of Raising Children

The cost of raising children includes child care such as daycare and  babysitting as well as school expenses, food, clothing, and entertainment. Clothing expenses can include diapers, footwear, and dry-cleaning expenses. Parents with school-age children also have to purchase books and other supplies.

Average Costs

Child care and education are among the most significant child-related expenses for families. In 2016, it was estimated that it would cost an average of $233,610 to raise a child born in 2015, according to the USDA.

Tips for Saving

When it comes to daycare, you can try to cut back by relying more on help from family or friends. “If your parents have the ability to watch kids for a day during the week, that helps you save money,” Church said.


If you have a colleague or friend with children around the same age, you can potentially split the costs of a nanny or babysitter, or take turns watching each other’s children.

Health Care Costs

Health care costs are any costs related to medical and dental services, such as health insurance premiums, medical co-pays, and prescription drugs. Health care costs include any medical and dental appointments that fall outside of your insurance plan, including physical or mental health services.

Average Costs

Americans spent an average of $5,177 on health care costs in 2020, down 0.3% from the year prior. Health insurance was the largest component of health care costs, with spending averaging  $3,666, up 3.9% from 2019.

Tips for Saving

You can save on health care costs in several ways. First, ask your health care provider to prescribe generic medicine, which is significantly less expensive than name brands.

Take time to choose a health care plan that fits your needs. Ensure you are not spending more for coverage you aren’t likely to use. Take advantage of preventive care covered by your insurance, such as screenings that can catch health care problems early.


Consider taking advantage of a health savings account (HSA) or flexible savings account (FSA), if your employer offers one. They allow you to set aside pretax income to use for health care expenses, which can save you several hundred dollars per year.

Entertainment Expenses

Entertainment expenses are the costs for leisure activities such as going to the movies, streaming services, vacations, tickets to parks or museums, entertainment supplies, toys, or membership dues for clubs or organizations. They are not considered necessary expenses.

Average Costs

Americans spent an average of $2,912 on entertainment costs in 2020, down 5.9% from the year prior.

Tips for Saving

Figure out what’s important to you when you create an entertainment budget, Church said. Budgeting isn’t just about cutting down your expenses—it’s about figuring out what’s important to you.

“Budgeting is a give and take,” Church said. “I worked with one person who made a decent income but had absolutely no furniture in his apartment. He told me that it was more important to him to be able to go out and eat out whenever he wanted than to spend money furnishing a living space.”

Church recommends identifying what you value and want to spend money on. From there, you can create a budget to fit your needs.

Frequently Asked Questions (FAQs)

What is considered a household expense?

Your household expenses are your ordinary and necessary living expenses, such as mortgage or rent, food, utilities, and health care costs. They are the things you need to spend money on to live your lifestyle.

How do you keep track of monthly household expenses?

Use a budget to keep track of your expenses. With a budget, you can detail your monthly costs and income for a certain time period to see where you can make adjustments to meet your financial goals. Divide your expenses into those that are necessary, including food and utilities, and unnecessary, such as entertainment and eating out.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. U.S. Bureau of Labor Statistics. “Consumer Expenditures - 2020.”

  2. U.S. Bureau of Labor Statistics. “Consumer Expenditure Surveys, 2020.”

  3. U.S. Department of Energy. “Programmable Thermostats.”

  4. U.S. Department of Agriculture. “USDA ERS - Food Prices and Spending.”

  5. Washington State Department of Social and Health Services. “Categories of Household Expenditures.”

  6. U.S. Department of Agriculture. “The Cost of Raising a Child.”

  7. National Library of Medicine. “Eight Ways To Cut Your Health Care Costs.”

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