Issues

Spending Patterns By Age

U.S. Department of Labor

Bureau of Labor Statistics

Summary 00–16 August 2000

in Labor Statistics

As consumers age, both their level of spending

and the way they allocate their spending changes.

So called “life events” such as getting a first job,

marriage, having children, and retirement can

all have profound effects on spending patterns.

This report provides a brief examination of how

expenditures vary with age.

Twenty-six percent of the Nation’s consumer units1 (CU’s) have a reference person2

under the age of 35, and these families account

for less than 23 percent of total annual consumer spending. On the opposite end of the

age spectrum, households headed by someone

aged 65 and older account for more than 20

percent of total households but less than 15

percent of total spending. Households headed

by someone 35 to 64 years old account for the

largest share of the population—53 percent—

and an even larger share of overall spending—

63 percent.

The sections that follow examine expenditure patterns for these three age groups, as reported in 1998 by consumer units participating in the Consumer Expenditure Survey of

the Bureau of Labor Statistics.

Under 35

On average, the under-35 group spent $30,291

per consumer unit—about $12,000 per year

less than the 35-to-64 age group, but approximately $5,500 per year more than the 65-andolder group. (See table on reverse side.) In

addition, this group allocated their expenditures

very differently than did the other two groups,

as indicated by the share of total spending devoted to the various expenditure components.

The under-35 group allocated larger shares of

their average annual expenditures to food away

from home, alcoholic beverages, housing, shelter, rented dwellings, apparel and services,

transportation, and education. (See chart.)

Even though all three groups’ spending

share for food was approximately 14 percent,

the youngest group spent a larger share of their

food expenditure (46 percent) on food away

from home compared with the 35-to-64 age

group (43 percent) and the over-65 households

(35 percent).

The shares of total spending on housing

were also about equal for the three groups (between 32 and 34 percent) but differed significantly within the housing category. The under-35 households allocated 61 percent of their

housing expenses to shelter, compared with 57

percent and 51 percent, respectively, for the

35- to 64-year-old and 65-and-older groups.

Within the shelter category, 54 percent of the

under-35 group’s shelter expenses were allocated for rented dwelling, as compared to 21

percent for the 35- to 64 year-old-group and

26 percent for the 65-and-older group.

The under-35 older group are also least apt

to be homeowners. Sixty-seven percent of this

group are renters, compared with 26 percent

of the 35-to-64 group and 20 percent of the

65-and-older group. The under-35 group allocated 5 percent to apparel and services, the

highest of all three groups. The same is true

for transportation, to which the under-35 group

allocated a 20-percent share (compared with

19 percent for the 35- to 64-year-old group and

16 percent for the 65-and-older group). Fortyseven percent of these transportation expenditures were for vehicle purchases, again placing the youngest group at the top. The 2.3-

percent share that this group allocated to education was the highest, but the 35-to-64 group

was not far behind with a 1.7-percent share

Aged 35 to 64

The 35- to 64-year-old group had, on average, the highest level of total expenditures

($42,236) and spent more than the other two

household groups in all major expenditure

categories except for alcoholic beverages,

health care, and cash contributions. The under-35 group spent slightly more for alcoholic

beverages, while the 65-and-older household

expenditures for health care and cash contributions were greater.

1

 A consumer unit is composed of members of a

household related by blood, marriage, adoption, or

other legal arrangement; a single person living alone

or sharing a household with others but who is financially independent; or two or more persons living

together who share responsibility for at least 2 out

of 3 major types of expenses—food, housing, and

other expenses. The terms “consumer unit” and

“household” are used interchangeably in this summary. 2

 The reference person is the first member mentioned by the respondent when asked to “Start with

the name of the person or one of the persons who

owns or rents the home.” It is with respect to this

person that the relationship of other consumer unit

members is determined. 3

 Income values are derived from “complete reporters” only. In general, a complete reporter is a

respondent who provided values for at least one of

the major sources of income, such as wages and salaries, self-employment income, and Social Security

income. (A complete income reporter may or may

not provide a full accounting of all income from all

sources).

Food

Housing

Apparel and services

Transportation

Health care

Entertainment

Cash contributions

Personal insurance, 

0 10 20 30

Und

35 t

65 a

Expenditure shares for selected components: consumer units with

person under 35, 35 to 64, and 65 and older

Percent

pensions
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The 35- to 64-year-old group also had the

highest income before taxes ($52,142).3 This

is $17,655 (51 percent) more than that of the

under-35 group and $28,131 (117 percent)

more than that of the 65-and-older group.

However, the 35-to-64 age group had the highest expenditure “share” in only one major category: personal insurance and pensions. They

earmarked slightly less than 11 percent of their

expenditures for personal insurance and pensions, compared with 10 percent for the under-35 group and 4 percent for the 65-and-older

group. It appears that the 35- to 64-year-old

group’s spending pattern is more evenly spread

out among the expenditure categories than are

those of the other two groups.

Aged 65 and older

With average expenditures of $24,721, this

group spent less than the other two groups:

$5,570 (18 percent) less than the under-35 age

group, and $17,515 (41 percent) less than the

35- to 64-year-old group. They also had the

lowest income before taxes of all three groups.

The 65-and-older group did have the highest

level of expenditures in two major components,

health care and cash contributions. They spent

$2,936 on health care (a 12-percent share), almost $1,000 more than the 35- to 64-year old

age group and $1,900 more than the under-35

age group. The 65-and-older group spent

$1,529 and allocated over 6 percent of their

expenditures to cash contributions to persons

outside of the household, charities, churches,

and other organizations. In addition to health

care and cash contributions, the 65-and-older

households also earmarked larger shares for

food; food at home; utilities, fuels, and public

services; public transportation; personal care

products; and reading. Twenty-six percent of

this group’s housing expenses were allocated

for utilities, fuels, and public services, the highest share among the three groups.

Additional information

For more information about the data presented here, contact Mark Vendemia in the

Division of Consumer Expenditure Surveys,

Bureau of Labor Statistics at (202) 691-5134,

or by email at Vendemia_m@bls.gov. To

find Consumer Expenditure Survey data on

the Internet, access http://stats.bls.gov/

csxhome.htm, the BLS Consumer Expenditure Survey homepage. Material in this publication is in the public domain, and, with appropriate credit, may be reproduced without

permission. This information is available to

sensory impaired individuals upon request.

Voice phone: (202) 691-5200; Federal Relay

Service: 1-800-877-8339.

Number of consumer units (in thousands) ....... 28,224 57,128 21,830

Income before taxes ........................................ $34,487 $52,142 $24,011

 Homeowner .................................................. 33 74 80

 Renter .......................................................... 67 26 20

Total expenditures ........................................... $30,291 $42,236 $24,721

 Food ............................................................. 4,138 5,648 3,456

 Food at home ............................................. 2,246 3,232 2,264

 Food away from Home ................................ 1,892 2,416 1,192

 Alcoholic beverages ..................................... 354 331 194

 Housing ........................................................ 10,300 13,677 8,388

 Shelter ........................................................ 6,227 7,825 4,271

 Owned dwelling ........................................ 2,611 5,598 2,817

 Rented dwelling ........................................ 3,349 1,638 1,092

 Utilities, fuels, and public services .............. 1,906 2,741 2,171

 Household operations ................................. 538 581 464

Items Under 35 35 to 64 65 and

older Items Under 35 Under 35 65 and

older

Average annual expenditures and characteristics: consumer units by age of the reference person, Consumer Expenditure Survey,1998

 Housekeeping supplies ...................... 314 595 393

 Household furnishings, equipment ..... 1,315 1,936 1,089

 Apparel and services ............................ 1,592 2,039 820

 Transportation ....................................... 5,974 7,923 4,025

 Vehicle purchases .............................. 2,796 3,571 1,593

 Gasoline and motor oil ........................ 910 1,212 645

 Other vehicle expenses ...................... 1,938 2,652 1,382

 Public transportation ........................... 330 487 405

Health care ........................................... 969 1,968 2,936

Entertainment ....................................... 1,528 2,120 1,044

Personal care products and services ... 339 458 330

Reading ................................................ 114 183 163

Education ............................................. 686 709 102

Tobacco products ................................. 233 340 151

Miscellaneous ...................................... 634 1,034 694

 Cash contributions ............................... 536 1,232 1,529

 Personal insurance and pensions ........ 2,895 4,573 888