Americans Are Spending a Third of Their Income on Bills
This article originally appeared on SoFi
By Anneken Tappe
Inflation may have fallen from its multi-decade peaks in 2022, but many Americans still feel stressed about their bills.
The average American household spends $2,126 per month on the 10 most common household bills, or more than $25,000 annually, according to data from the U.S. Census Bureau and a report from bill management platform doxo. That’s more than a third of the median household incomes, and up 19% since 2019.
Most Expensive Bills
According to doxo, the costliest household bills are mortgage or rent payments, auto loans, utilities, auto insurance, health insurance, cable and internet, mobile phone bills, alarm and security, and life insurance.
Many of these have risen during the pandemic, with health insurance, mobile phones, and utility bills all up more than 25% since 2019. And with interest rates rising over the past year as the Federal Reserve hiked interest rates, consumers who have recently taken out home or car loans also have higher bills to deal with.
Are Wages Keeping Pace?
If income levels were rising to keep pace with these bills, then year-over-year price increases wouldn’t be as problematic. However, the Census estimates that the median U.S. household earned $74,580 in 2022, up just 8.5% from $68,703 in 2019. Economists have long been worried that high costs will eventually curtail the spending power of American consumers, who are the backbone of the economy. But so far this hasn’t happened yet.