20 Average Monthly Expenses to Include in Your Budget

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Whether you’re creating a new budget or refreshing an old one, you’ve probably noticed how important (and difficult) it is to get your monthly expenses right. Underestimating or missing an expense can throw your spending strategy into disarray, so it’s helpful to have guidance on the budgeting norm.

To help you get it right, we’ve assembled a list of the most common average monthly expenses. 

20 Common Monthly Expenses

1. Housing 

Your costs will vary significantly depending on where you live. For example, the median home value is $328,200 in New Jersey, but $140,100 in Ohio. Cost-of-living calculators can help you adjust your budget estimates based on your location.

According to the Department of Labor, the average household spent about $1,674 per month on housing, consuming the largest portion of the average monthly income of $6,553. 

(The numbers that follow in this article are based on the Department of Labor data unless another source is cited.)

2. Transportation

Transportation accounts are the second-largest budget item for most people, with average monthly expenses of $813, including vehicle purchase and gasoline.

3. Food​

Everyone’s gotta eat—and most spend an average $660 on monthly groceries and eating out.

4. Utility bills

Idaho residents pay the least for heat, gas, water, electric cable and Internet at $344 per month, according to Move.org. Hawaiians pay the most, at $731 per month. You might be able to reduce this amount by foregoing cable.

5. Cell phone

Monthly wireless fees run from $35 to $140 for a family plan, but you could spend as little as $9.99 a month if you want only basic service with no data.

6. Childcare and school costs

Childcare costs range from $401 per month in Mississippi to $1,886 in Washington, D.C. Once your children are of school age, you may need to account for private-school tuition. But even if you send your children to public school, you will need money for various fees and school trips. 

7. Pet food

It costs $20 to $60 per month to feed a dog, but you may need to spend more if your pet requires a special diet.

8. Pet insurance

For $14 to $98 a month in premiums, you may be able to head off a big vet bill. 

9. Clothing

The average U.S. household spends $155 per month on apparel, according to the U.S. Department of Labor

10. Health insurance

If you don’t have employer-based health insurance, you may want to purchase a plan. Health insurance costs differ dramatically depending on your age, where you live and on personal characteristics such as whether you smoke.

Depending on these factors, you could expect to pay from $180 to $1,156 a month. 

You may need to add more to that figure to account for deductibles, co-pays, over-the-counter medicines and other health-care expenditures.

11. Fitness

A gym membership may feel like a must for maintaining your health. The average gym membership costs about $58 per month but can run significantly higher. 

12. Auto insurance

Auto insurance on average costs about $135 per month, though that number is included in the Transportation figures from the Department of Labor mentioned earlier.

13. Life insurance

You can buy term life insurance starting at about $13 per month.

14. Home insurance

Renters or homeowners’ insurance can help protect against theft, fire and other threats, but if you own your house, you may already be paying for homeowners’ insurance through your mortgage. Renters’ insurance is about $17 a month, and homeowners is roughly $35 a month for every $100,000 in home value. 

15. Fun stuff

Figures on these items are hard to come by, so if you have a specific trip in mind, start scoping out costs and figure out how much you need to save each month to pay for it.

16. Student loans

Nearly 70 percent of 2018 graduates took out student loans, with an average of $29,800 in borrowing. Based on that amount, you would owe $576 per month if you pay the loan off in five years at 6 percent interest. 

17. Credit-card debt

If you carry the average balance of $5,331 and pay 15 percent interest, you could pay the card off in a year with monthly payments of $481.12. 

18. Retirement

You’re the only one who’s going to pay for your retirement, possibly with a little help from your employer in the form of matching funds. The earlier you start saving, the longer your money can benefit from the power of compound interest. Some financial planners recommend setting aside 10 to 15 percent of your income for retirement, but if you can save even more, you will reach your retirement goals more quickly and have more protection against a market downturn.

19. Emergency fund

At a minimum, keeping three months' worth of expenses on hand can see you through tough times. The average American household spent $61,224 in 2018, or $5,102 a month. Three months of expenses would suggest having a rainy-day fund of $15,306.

If you set aside $1,276, you would accumulate $15,306 in a year. That amount may sound intimidating, so if you can’t manage that, start smaller. 

20. Large purchases

Plan to buy a car every five years? Put a new roof on the house in two years? Make a list of these larger expenditures and set aside enough every month so that you can pay for them when the time arrives.

Get your monthly expenses in check

Knowing the average cost of living can help you identify opportunities in your budget for saving and align your spending with your goals. Use these averages to help ensure your own budget categories are under control.