Hey guys, welcome to a fresh week of saving money!
Personal Capital just came out with their inaugural “State of Spending” report, and thought it would be fun to highlight some of their findings and see where we compare :) Because who doesn’t like doing that, right?
For those not familiar with Personal Capital, they’re a FinTech company that helps people manage their money/investments better and are often referred to as “Mint.com but on crack.” Or, maybe that’s just what we call them here ;) In either case, check out our full review of them if you’re interested. It’s totally free, and could be super helpful: Why I Use Personal Capital Almost Every Single Day
Back to the report – they analyzed over 148,225,107 transactions from 2015 to see how people saved and spent their money. The results are listed below in bold, accompanied by my own two cents, of course. I then tacked on another list of interesting stats at the end from a different poll they did late last year as well. Love this stuff!
Let’s get started… see how you compare as you read through!
Americans pay a whopping $725 per month to own, maintain, insure and gas up a car.
Ouch. Yet another reason to drive a beater! No car payments to worry about, no stressing when anyone hits, dings, keys your car, typically lower insurance rates, and just overall ease of both mind and wallet. Now maintenance costs can be more over time than a newer car, but so far I haven’t wanted to go back once in the past 8 years of beater ownership :) In fact, I dropped a healthy amount to keep the Caddy alive just this week that I’ll be sharing about in a few! All about them priorities, mang…
On average, people spend $17.73/mo @ Starbucks, $6.20 @ Dunkin Donuts, $5.80 @ Caribou Coffee and $5.41 @ Peet’s.
Seems pretty low to me! I used to hit Starbucks almost every single day back during my 9-5 days, and every stop cost me at least $4 bucks. So if I factored in, say, 4 trips a week x 4 weeks we’d be looking at around $64 for the month. Still very much worth the trade off for that sweet sweet caffeine, but still. Now it’s a treat when I get to go out and spend some money at a coffee shop! I typically brew my coffee at home every day now, but only out of pure laziness and speed (I work from home) ;) #FrugalByAccident
Uber rides are requested 7x more than traditional cabs. Lyft rides are requested 5x more often. Average spend per user per transaction: $29.20 w/ cabs, $21.86 w/ Uber, $18.01 w/ Lyft.
So not only are more people using car sharing services than cabs these days, but cabs are significantly more expensive! Now I rarely use any of these just because I hardly ever need to (I took my first Uber ride late last year just to finally check it out) but regardless it’s clear what the people want for the future. And if you’re a hustler like fellow blogger Harry, you can be making bank driving for them too! Check out Side Hustle #52 here on how much you can make driving for Uber & Lyft.
20-30 Year olds spend more of their food budget on restaurants than any other age group.
Hah – I believe it. I did too, mainly out of laziness and just wanting to hang out with my friends more! I don’t think I’ve gone out to eat in at least 2-3 months now… Funny how things change when you get older/more conscious of your money :) Then again, all my friends are now online – womp womp.
The average amount of trips people take to the grocery store each year: Kroger – 26, Safeway – 18, Walmart – 16, Costco – 13, Whole Foods – 12, Trader Joe’s – 9.
I’m not sure if this means that all people take the above trips over the year or just one of the particular sections (we hit up grocery stores twice a week which would equal about 96 times total over the year!) but either way it’s kinda neat to see. I don’t see Giant or Food Lion, or even Aldi on the list at all though? Maybe Personal Capital lovers are too good for them? ;) Funny thing about Costco though – my kids are OBSESSED with going there on the weekends now ever since we showed them the magic of free samples… I’ve never heard of any toddlers yelling out “Costco” instead of the park or playground or any other place normal kids like to go, haha…
And speaking of Costco, I just read a great post by Jim over at Wallet Hacks on how to save some good money there. Check it out if you’re looking for some new ideas: How Costco Pays Me to Be a Member
The average breakdown of spending categories *per person*:
- Travel: $475.79
- Dining: $386.09
- Education: $325.97
- Children: $148.47
- Pets: $111.38
- Gas: $68.42
Travel for us: Nothing (sad face)
Dining: Haven’t checked it in a while, but we probably pay double that each month ever since having kids… But since the #’s above are for 1 person and we have 4 total in our family, maybe we’re doing alright? :) Still far from my man Dan who feeds his family of 8 on only $1.00/meal though! Crazy!
Education: Nothing anymore now that my wife’s graduated grad school after 7 years – woop!
Children: Haven’t tracked it ever since our epic Baby Costs Tracker circa 2014 – remember that one?! When we tracked almost every single penny spent from conception to age 1 and 1/2? Haha.. Oh man, good times, good times… I had to stop it once baby #2 came around just cuz I knew I’d have my hands full at that point, but I do kinda wish I’d had make it all the way up to 18 years to prove once and for all how much babies cost ;) You’ll have to click here to see what our total costs ended up being at that point – quite the project to take on! Both babies AND tracking their expenses!
Pets: Maybe spend $20 or less for our cat?
Gas: We fill up my wife’s Toyota once or twice a month (let’s call it 1 and 1/2 at $25 a tank making it $37/mo) and then I literally fill up FrankenCaddy once every THREE months. If that. So tack on another $10/mo’ish and we spend about $50 total a month on gas, or $25/mo per person… Not too bad!
Average spend on clothes/month: $83 @ Nordstrom, $77 @ Bloomingdale’s, $42 @ Macy’s.
No Target or Kohls?? Or T.J. Maxx? Come on! how many times have any of you reading this right now stepped foot inside a Nordstrom or even Bloomingdale’s this month? Not to mention spend any money there? I’d be interested to know why they pulled these guys out of alllllll the places in the country people shop for clothes. I bet you $1,000 it’s because the makers of the report live in a large city and are more familiar with them… Either that, or these are the *highest* amounts people spend in a store and thus is why they’re concentrating on them. Though even Target in that case would count cuz you can NEVER leave that store only buying a few items! Haha… I want a re-count!
42 out of 50 states prioritize retirement contributions over any other financial expense
More people save for retirement in Delaware on average per person each year ($28,248.12) than any other state. Followed by New Mexico ($27,930.49) and North Carolina ($27,143.74).
That sounds incredibly high, doesn’t it? I thought most people hardly have that much in their accounts in total, much less adding to it every year… Could be the fact most users of Personal Capital are probably more financially savvy than the average American though. Considering its whole purpose is to help people manage their wealth :)
Other state highs:
- Idaho has the most *electronic* expenses per person in a year @ $12,490.91
- Michigan pays the most in healthcare/medical expenses @ $21,962.25
- Texas pays the most *mortgages* in a year @ $32,386.97
- And South Dakota people stash the most in (non-retirement) *savings* @ a whopping $51,373.49 per person per year. Which is just insane, if you ask me. And has to be due to some people stashing hundreds of thousands and skewing the averages, right? Anyone from South Dakota reading this right now up an extra $50gs in their account from last year? :)
You can check out how your state ranks in retirement and other random gems here.
The State of Retirement Readiness Across America
Now here are those nuggets I was mentioning earlier from that Harris Poll Personal Capital conducted late last year as well… These go more into the *feelings* people have vs the spending stats. And we all know how big of a role emotions play with our finances!
60% of Americans report that they won’t be ready if an economic downturn strikes.
Doesn’t sound too surprising, eh? I always say just ignore everything and concentrate on what you actually have control over: YOUR MONEY. Get it situated now as best you can and set yourself up to weather any storm that lies ahead… Or better yet, be prepared to CAPITALIZE on them once they come! Which we all know will at some point as that’s the nature of life. And particularly with the stock market. I can also tell you this: when the $hit hits the fan, everyone reads financial blogs more :) So if you’ve ever been wanting to start your own, today’s as good of a day to get going as any!
The #1 reason Americans feel unprepared for retirement is they lack savings (reported by 25% of people).
That’s definitely an important one! Even just having a few thousand dollars saved can be all the difference in the world. If you’re just starting out, try hitting a milestone of $100 the first couple of months, then $1,000, then $5,000 and when you get to a $10,000 buffer go ahead and invoice me for a free beer or glass of wine on the house :) Then we’ll drink together in celebration across the ‘net!
The #2 reason Americans feel unprepared for retirement is they aren’t sure how much money they’ll need in retirement.
And the “experts” don’t help with that either, do they? I won’t harp on this again as we recently got into it all, but if you haven’t done it already, figure out how much *you spend every year* and let that be your guiding point in how much you may need in the future. The magic retirement number heavily relies on your expenses (as well as guestimated future expenses), so concentrate on THAT before all others. What you’ll need for retirement can be drastically different than what your neighbors or family or even Uncle Joe’s cat needs, so ignore the arbitrary number these gurus throw out!
For 28% of Americans, cost of living outweighs health care (14%), age (12%), and social security (4%) as the most important factor when planning for retirement.
Good!! People are starting to pay attention then! :) I should have read that stat before my little speech up there, haha… Only matters though if you start *taking action*! Knowing you spend too much and doing something about it are two completely different things. Start prepping now while you have time on your side!
Nearly 40% of Americans who have a retirement account are not aware of how much they pay each year in account fees.
I used to be one of those people!!! And was paying like 13x what I should have been – ugh… If this is you, check out Vanguard.com and consider index funds… Super easy to follow, and a decent strategy too. As long as you’re okay with getting average returns and being “boring” :)
30% of Americans rely on family for financial advice, over advice from a professional financial advisor (sought by 27%). Only 8% of Americans get advice from a broker.
Personal connections are key, baby! Which is why blogs have taken off over the years too – much easier to relate to normal every day people trying to help, right? Who you get to know and trust over the years? Hopefully more businesses/advisors start taking notes in the future and quit hinging their “advice” on what fees they get in return, ugh. See: An Insider’s Warning About Financial Advisors
And there you have it! How does your spending compare? How many of those stats surprised you? Do you feel better or worse now about your finances? ;)
The big takeaway, of course, is to first KNOW at least roughly where all your money is going each month, and then to go and do something about it if you hate what you see… We’ve all been in these stages before, but best to brush that dirt off your shoulders and get right back to it! And while it’s fun to see what everyone else is doing in the country, what really only matters in the end is how YOU’RE doing with your finances. Keep on paying attention and all will be good in the end, I guarantee it.
See ya back here on Wednesday!
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!