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Spending Categories


As previously mentioned, Savings Rate is the most important KPI when determining how long it will take to reach financial independence. We recommend reaching a Savings Rate of 50%, but if you can get it higher than that, do so! However, it would be impossible to advise as to how to increase your Savings Rate, without first going over how your spending likely breaks down.

Here is a breakdown of the average American's spending patterns.

Average Spending Breakdown


  • The numbers above are averages taken from government created surveys. To figure out your specific numbers, you will need to complete a few budgets.
  • This data comes from the Consumer Expenditures Report from the US Bureau of Labor Statistics.

The Big 3

Housing, Transportation, and Food (The Big 3) take up 62% of the average American spending.

Since we want to reach to a Savings Rate of at least 50%, these are the spending categories we should optimize first.

Increase your Savings Rate