Where does the money go?

• Author: Marcus, Morton J.
• Position: Cover story

U.S. SPENDING

The U.S. Bureau of Labor Statistics (BLS) has released consumer spending data for 2004, telling an interesting story of how we Americans spend our money. (1)

We have always believed that our spending on clothing for females is greater than that for males. From these data, we can confirm that American households spend nearly twice as much on women's clothes than on men's clothing. These are not per person figures, but per household.

Spending will vary by many factors. Income makes a difference in spending as does education, age, race, urban or rural setting, and region of the country. In this article, we'll focus on differences by age.

Let's return to those expenditures for apparel. Spending for males and females both rise until we reach the 45 to 54 age group, then declines. The large difference between spending on females and males in the oldest group (75 and up) is because there are 138 women for each 100 males. In the 45 to 74 age groups, the ratio is closer to 1:1.

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There are many differences related to age. Home ownership, as expected, rises while renting falls as we age. But as we get older, we shed our mortgages.

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What we spend on shelter rises with age until the ages of 35 to 44. By age 65 and older, our utilities, fuels and public services are equal to almost half of our shelter costs.

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Household income also rises with age until peaking in the 45 to 54 age group.

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The sources of income change dramatically over time. As wages and salaries fall as a percent of income, they are replaced by Social Security, private and government pensions.

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Eating away from home accounts for nearly one-third of the food expenditures of those age 75 and older. All other groups spend an even greater portion of their food dollars eating out, with the under 25 group spending half of their food dollars away from home.

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While we talk a great deal about the costs of health care, we neglect the major expenditures we make for transportation. The average household spends $7,801 on transportation and only $2,574 on health care, including insurance and drugs.

Only for those 75 and older does health care expenditures exceed transportation, yet no one discusses a transportation crisis. Entertainment spending exceeds health care spending until they are even at 45 to 54, after which health care becomes dominant.

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As for sin, we spend...