The 3 Biggest Expenses Stopping You From Retiring Sooner

Couple tearing their hair, looking at a piggy bank.
Photo by Inesbazdar / Shutterstock.com

Pop quiz: How much money did your household spend last year? If you don’t track expenses, you may have no idea how many dollars departed your bank account in 2016.

The average household, however, blew $57,311 — an increase of 2.4 percent since 2015. Most of that spending — 61.3 percent — went toward only three types of expenses: food, housing and transportation.

This unsettling data is courtesy of the U.S. Bureau of Labor Statistics’ recently released Consumer Expenditure Survey data for 2016. The data measure how consumers allocate their spending, with expenditures classified into eight main categories.

Here’s how much the average household spent in those categories last year:

  • Food — $7,203
  • Housing — $18,886
  • Apparel and services — $1,803
  • Transportation — $9,049
  • Health care (includes health insurance) — $4,612
  • Entertainment — $2,913
  • Cash contributions — $2,081
  • Personal insurance and pensions (includes Social Security) — $6,831

Every dollar you spend on expenses like food, housing and transportation is another dollar you didn’t invest in a retirement account. So, such expenses stand between you and retirement: Technically, the more money you allocate to them, the further back you push retirement.

Let’s take a closer look at the three biggest expenses that are keeping Americans from retiring sooner.

1. Food

The Consumer Expenditure Survey further categorizes food expenses as either “at home” or “away from home.” Spending in one of those categories ballooned a lot more than the other last year:

  • Food at home — $4,049 (up 0.8 percent)
  • Food away from home — $3,154 (up 4.9 percent)

Unless dining out frequently is more important to you than retiring sooner, perhaps it’s time to review articles like “The $200,000 Lunch” or “12 Ways to Slice Your Next Restaurant Check in Half.”

Even if eating out is important to you, though, know that giving it up is not the only way to save money on food away from home. As Money Talks News founder Stacy Johnson points out in “The 10 Commandments of Wealth and Happiness“:

“If going out to dinner with your significant other is something you enjoy, not doing it may create a happier bank balance, but an unhappier you. … Eating an appetizer at home, then splitting an entree at the restaurant, however, maintains your quality of life and fattens your bank account. Finding ways to save is important, but avoiding deprivation is just as important.”

2. Housing

A traditional rule of thumb says that to maintain a healthy budget, you should not spend more than 30 percent of your income on housing.

That might seem impossible, given that home prices and rent costs generally have increased in recent years. Still, it won’t hurt to take a closer look at your housing costs and current options for decreasing them.

Stacy offers tips for potential buyers in “Stop and Think: How Much House Can You Really Afford?” He says:

“One of the dumbest things Americans do is buy the biggest, fanciest things they can possibly afford. And nowhere is this mistake more evident than in home shopping.”

Renters might want to check out “How to Live Rent-Free (or Way Cheaper Than You Are Now).”

3. Transportation

Getting around is our second-biggest expenditure despite that transportation spending has fallen in recent years. Total transportation expenditures by the average household dropped 4.8 percent between 2015 and 2016. The Bureau of Labor Statistics primarily attributes this to folks spending 9.1 percent less on vehicle purchases and 8.7 percent less on gas and motor oil last year.

The average annual gas and motor oil expenditure has been falling since 2012.

The only transportation cost subcategory that increased last year, rising by 4.6 percent, is the “other vehicle expenses” subcategory. It includes:

  • Finance charges
  • Maintenance
  • Insurance
  • Rentals/leases/licenses

If more drastic money-saving methods like ditching your car aren’t options for you, check out “6 Ways to Cut the Cost of Your Commute to Work.”

What’s your take on this news? Sound off below or our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Gadgets Under $60 That Can Boost Your Health
7 Gadgets Under $60 That Can Boost Your Health

These Amazon finds can help ease foot aches, boost energy and even protect your heart.

29 Purchases That Can Save You Money Every Day
29 Purchases That Can Save You Money Every Day

Sometimes, you’ve got to spend to save.

Never Buy These 10 Things With Your Credit Card
Never Buy These 10 Things With Your Credit Card

Credit cards offer many conveniences and protections, but sometimes it’s simply smarter to keep the plastic tucked away.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?
Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?

You could save more than $30,000 by setting aside these costly expenses for just one year.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

Prices Are Soaring on These 7 Items
Prices Are Soaring on These 7 Items

Some surprise price jumps are making life more difficult for consumers.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

This iconic dinnerware is prized for everyday use as well as reselling for profit.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

7 Home Improvements That Cost a Lot More in 2021
7 Home Improvements That Cost a Lot More in 2021

These projects will take a bigger bite out of your budget than in the recent past.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

7 Big Purchases You Should Never Make
7 Big Purchases You Should Never Make

Sometimes a big-ticket purchase is nothing more than a big waste of money.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.