It can be expensive to keep the gas tank full, pay the bills, and decide what to make for dinner.
Those and other costs add up over the course of a year, especially for low-income Americans. The Bureau of Labor Statistics publishes annual employment data, with the latest projections taking employment through 2024.
Households in the top 20% of pre-tax incomes make $264,510 on average, while low-income earners make $16,658 on average before taxes.
In 2024, the top 20% of households spent three times more on housing costs than the lowest 20%, about 38 times more on personal insurance and pensions, and about five times more on transportation. You can click on categories in the following chart to see spending estimates.
Households with higher incomes spent more on average on housing costs, but with a lower share of their total spending than 20%. Low-income families allocate more of their income to food and health care. You can click on the categories near the top of the following chart to see more estimates.
The power of high earners can be strong
The US has been a K-shaped economy, where people with higher incomes do better than others, and support consumer spending.
Low-income Americans have seen income growth slow significantly since the 2022 peak, and some are adjusting their budgets. A survey from the Consumer Finance Center at the Federal Reserve Bank of Philadelphia in October found that low-income Americans making less than $40,000 are more likely to return their spending than those making at least $150,000.
About 28% of those making less than $40,000 reported changes in their circumstances, such as work or family size, as the main driver of spending patterns, a higher proportion than other types of income. Less than half of low-income respondents say that changes in the cost of goods and services affect their lifestyle.
A frozen job market, where job gains are not wide, affects all types of job seekers, but it may disproportionately affect low-income Americans.
“As we enter 2026, reduced employment and wage growth, combined with the cumulative effect of several consecutive years of rising living costs were already weighing on low-income consumers,” Atsi Sheth, chief credit officer at Moody’s Ratings, said in a statement. “Currently, the impact of the conflict in the Middle East on the price of energy and food could destroy the purchasing power for this sector, and result in a reduction in discretionary spending such as travel and entertainment.”
Mark Hamrick, a senior economist at Bankrate, told Business Insider in early March that the oil boom could mean lower- and middle-class families paying more for gas. AAA data showed the national average on Monday was about $4, up from $3 a month ago.
High-income families are not immune to economic hardship.
“High net worth households have so far been stagnant, partly because of strong inflation,” Sheth said. “However, if the volatility of the financial market affects sentiment, even if household spending continues to increase, its pace may slow.”