Sometimes I get a question such as ‘Is our spending in line with what other people are spending?’. Which can be tricky, as different priorities apply to different people, and that’s (priorities) really what the focus should be on anyway.
However that doesn’t make the question go away.
By now I have concluded that it’s in our nature to want to know 2 things: 1) How am I doing with respect to others and 2) How am I doing with respect to being able to meet my financial goals?
The latter tends to be a whole lot easier to quantify than the former.
And so I found this WSJ article interesting along with it’s associated Spending infograph.
It shows that Housing, at 33%, is still our biggest expense. No surprise there.
But what is a bit alarming is our % spending on insurance and personal pensions has gone down.
Without knowing more about what’s behind that number, at first glance it’s not good to have this number become lower as a percentage of overall consumption. It may be due to insurance and personal pensions being more affordable, not sure, but scrimping in this area would generally increase a person’s risk to having to self insure in a future insurance or retirement scenario.
I suspect what may be behind the decrease is people are seeing costs in other categories go up and are taking away from this category in order to fund the others.
It’s an interesting Infograph and does help serve as a guide to what % a person may be spending on any given category with respect to other people.