What item in your monthly budget do you spend the most on? Well, if you're like most Americans, it's housing. American families, no matter how big or small they are or where they might fall on the economic ladder, spend most of their money keeping a roof over their heads. But the very richest Americans spend way more money doing it than the rest of us.
The top 20 percent of Americans in terms of wealth spend more on housing than Americans at the middle and bottom sections of the income ladder. What does that mean in dollars and cents? Housing accounts for almost $31,000 per year for the wealthy set, as demonstrated in the chart below from Pew Charitable Trusts.
That's a big chunk of change. You'll also notice that the $30,901 the top 20 percent spend on housing each year is more than both the middle- and bottom-income spend on all their core needs—housing, food and transportation—combined.
The Pew study along with information from the Bureau of Labor Statistics also uncovered this insight: The less you make, the more of your income goes to housing. It doesn't seem fair, but that's what the statistics show. The top quintile by far spends the most dollars on housing, but housing only adds up to 31 percent of their annual spending. The bottom quintile, while spending far less in terms of total dollars, spends about 40 percent of their annual expenditures on housing.
In general, across all three major spending areas, the Pew study found that trend continues: The wealthiest Americans spend more in total dollars on necessities than anyone else, but their spending is at the same time a lower percentage of their overall income. Though there is one area where that doesn't hold true: For the lowest income Americans, transportation is a smaller percentage of their total spending than anyone else.
For more information, check out The Precarious State of Family Balance Sheets from The Pew Charitable Trusts.