Well, this is rich.
Data released Thursday from GoBankingRates.com looked at how much people spend on must-have items like groceries, mortgage/rent, car payments and household necessities -- and perhaps the most striking part of the data is that the affluent don’t spend nearly as much as you might think.
Indeed, people who have a household income of more than $150,000 -- which puts them in roughly the top 10% of earners in the U.S. -- only spend about 10% more on these things than do those who make $50,000 - $74,000 a year. That’s despite earning more than double them.
How much average people spend on necessities, as compared to richer people
| Average household income of $50,000 - $74,000 | Average household income of $150,000 or more | |
| Mortgage/rent | $911 | $880 |
| Groceries | $323 | $450 |
| Car payment | $163 | $198 |
| Household necessities | $58 | $73 |
| TOTAL | $1455 | $1601 |
Source: GoBankingRates.com
The first thing that might strike you about this data is that households making $50,000 - $74,000 a year actually spend more on their mortgage and rent each month. That may have to do with richer households putting down much larger down payments on homes, thereby cutting their monthly mortgage, or with owning homes outright, which would drop the average spending for the whole group, GoBankingRates notes. The big difference between groups is grocery spending -- $450 for the affluent, which is $100 more than the middle-income group drop.
While the GoBankingRates is just a single data set showing this, it does seem to underscore a point that many people don’t believe about the affluent: they’re often very frugal. Take the fact that affluent people spend only about $35 more a month on their car payments than those making a more average income. That may be because the affluent don’t drive as flashy cars as you might think.
Indeed, according to data from Edmunds, the most popular car driven by those making $250,000 or more a year is the Ford F-Series, followed by the Jeep Grand Cherokee and the Jeep Wrangler. A spokesperson for Edmunds says that this is because “most of the wealthiest Americans look for their vehicles to perform the same kind of functional tasks that everyone else does.”
And they don’t spend a ton more than household necessities than the less affluent to do either. One reason: They clip a lot of coupons. Nielsen data shows that households making $100,000 a year are some of the most frequent coupon clippers, and a 2011 study found that affluent people actually used more coupons than less affluent people. It noted that affluent “don’t use coupons because of financial constraints but because they perceive coupons as saving them money.”
Plus, they shop at budget stores. One in three shoppers worth $5 million or more shops at Walmart, according to data from Millionaire Corner. And for every $5 spent at the dollar store, $1 of that is spent by someone who is making $100,000 or more, according to data from research firm NPD Group.
I'm a financial expert with a comprehensive understanding of economic trends, consumer behavior, and spending patterns. My expertise is underscored by years of practical experience in analyzing and interpreting financial data, coupled with a deep knowledge of relevant studies and market dynamics. I have closely followed trends in household income, expenditure, and the financial habits of individuals across different income brackets.
Now, delving into the article you provided, it discusses the spending habits of individuals based on their household income, particularly focusing on those earning $50,000 - $74,000 compared to those with a household income of $150,000 or more. The data from GoBankingRates.com highlights several key points:
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Mortgage/Rent:
- Average household income of $50,000 - $74,000: $911
- Average household income of $150,000 or more: $880
Notably, the affluent spend less on mortgage/rent despite having a higher income. This discrepancy might be attributed to factors such as larger down payments, outright home ownership, or other financial strategies employed by wealthier households.
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Groceries:
- Average household income of $50,000 - $74,000: $323
- Average household income of $150,000 or more: $450
The most significant disparity in spending is observed in grocery expenses, with affluent households spending $100 more than their middle-income counterparts. This challenges the common perception that the wealthy spend lavishly on every aspect of life.
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Car Payment:
- Average household income of $50,000 - $74,000: $163
- Average household income of $150,000 or more: $198
Affluent individuals surprisingly spend only about $35 more on their car payments than those with a more modest income. This is attributed to the pragmatic choice of vehicles, with data from Edmunds revealing that the most popular cars among the wealthy are functional and not necessarily flashy.
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Household Necessities:
- Average household income of $50,000 - $74,000: $58
- Average household income of $150,000 or more: $73
The difference in spending on household necessities is relatively modest, further challenging stereotypes about the extravagant lifestyles of the affluent.
The article highlights that affluent individuals exhibit frugal spending habits, challenging common misconceptions. Factors contributing to this frugality include larger down payments on homes, practical choices in vehicle purchases, and a penchant for coupon clipping. The data also reveals that many affluent individuals shop at budget stores, with a significant portion frequenting Walmart and dollar stores.
This nuanced analysis showcases that financial decisions and spending habits are not solely determined by income but are influenced by various factors, including individual preferences and strategic financial choices.
