By:
Americans’ spending is rising, with people in some states, such as Massachusetts, spending as much as $69,101 each year. But this generally isn’t caused by frivolous spending — the largest expenditures are related to housing and medical costs. The nation’s average cost of buying or refinancing a single-family home increased by about 57.1% between 2019 and the fourth quarter of 2024, according to the Federal Housing Finance Agency.
The MarketWatch Guides team examined data from the U.S. Bureau of Economic Analysis to learn about consumers’ spending by state. Find out your state’s spending habits and learn tips for balancing savings with spending, such as opening a certificate of deposit to build your nest egg.
Key Findings
Americans spent an average of $56,202 per person in 2023 — a historical high.
Housing ($9,996) and health care ($9,130) were the largest expenditures.
Consumers in Washington, D.C., ($92,037) and Massachusetts ($69,101) have the highest expenditures on average.
The average American’s spending has been increasing since 2020.
How Much Do Americans Spend Every Year?
The Bureau of Economic Analysis found that Americans spent an average of $56,202 per capita in 2023. About two-thirds ($37,917) of that can be attributed to services, which are consumed at the place and time of purchase. Housing and health care were among the most notable expenses, taking up 18% and 16% of overall consumption on average ($9,996 and $9,130, respectively). Roughly one-third of spending ($18,285) was for items such as food ($4,312) and other nondurable goods ($4,658), which are products expected to last no more than three years.
Tariffs are likely to make health care, housing and food even more expensive this year. The U.S. relies heavily on pharmaceutical imports, with China being a major producer. For housing costs, roughly 60% of home builders surveyed by the National Association of Home Builders in April said their suppliers had already increased prices or announced price hikes for materials because of tariffs, resulting in an average cost increase of $10,900 per home.
Here’s a breakdown of the consumer spending that made up the $56,202 average per person in 2023:
DescriptionCategoryPer Capita SpendingPercentage of Total SpendingHousing and utilitiesServices$9,99618%Health careServices$9,13016%Other servicesServices$4,7258%Other nondurable goodsGoods (nondurable)$4,6588%Food and beverages purchased for off-premises consumptionGoods (nondurable)$4,3128%Financial services and insuranceServices$4,2888%Food services and accommodationsServices$4,0747%Motor vehicles and partsGoods (durable)$2,2394%Recreation servicesServices$2,2074%Recreational goods and vehiclesGoods (durable)$1,8993%Transportation servicesServices$1,8423%Final consumption expenditures of nonprofit institutions serving householdsServices$1,6543%Clothing and footwearGoods (nondurable)$1,5233%Furnishings and durable household equipmentGoods (durable)$1,4343%Gasoline and other energy goodsGoods (nondurable)$1,3952%Other durable goodsGoods (durable)$8251%Source: U.S. Bureau of Economic Analysis
Which States Spend the Most Money?
Washington, D.C., and Massachusetts residents had the highest consumer expenditures at averages of $92,037 and $69,101 in 2023, respectively. Average consumer spending was reported to be the lowest in Mississippi ($42,131) and Arkansas ($44,254).
These findings correspond with cost-of-living data by state. According to the U.S. Bureau of Economic Analysis, Massachusetts ranked within the top 10 most expensive states to live in in 2023, with prices that are 8% higher than the national average. Mississippi ranked in the top 10 cheapest states to live in, with prices that are 13% lower than the national average.
These numbers also correlate with several FHFA housing cost statistics. For example, in 2024, the average cost of buying or refinancing a single-family home increased by about 5.8% in Massachusetts, while it decreased by 0.15% in Mississippi. This indicates Americans are spending more compared to previous years’ findings out of necessity, not by choice.
You pay $1,073 less than the national average
How Is Spending Changing?
From 2022 to 2025, Americans have been spending more each year. This can be attributed to factors such as rising costs, increased tariffs and people overspending. As of the first quarter of 2025, the average amount of debt in the United States was $62,500 per capita, according to the Federal Reserve Bank of New York.
“Unless people have the discipline to minimize that consumption, people will often continue the trend of spending more than they save,” Lukendric A. Washington, a certified financial planner and retirement income certified professional, told MarketWatch Guides. “I think younger generations find themselves needing more to live comfortably while not having the income to live in that reality.”
Historically, spending increases haven’t always been the case for Americans. Consumer spending dipped by 2.4% in 2009 following the 2008 recession, but it started to rise again by 2010.
Jumping ahead to 2020, U.S. spending dipped by 1.9%, with Minnesota (4.9%), Alaska (4.7%) and Hawaii (3.8%) seeing the greatest drops. This was largely due to the COVID-19 pandemic. In comparison, spending in Mississippi, Utah, Wyoming, Arkansas, Arizona and Idaho increased or remained relatively stable at that time. Spending started to rise again in 2021, increasing by 13.1%. Spending increases continued through 2022 and 2023.
Select your state from the chart below to explore how spending has changed in your state.
Financial Tips: Balancing Saving and Spending
With everyday spending rising, wallets are getting thinner. While it can be stressful to start (or keep) saving, it’s still possible to stash money away. Consider the low-risk, beginner-friendly savings tips below, which are typically free:
Start tracking your spending: Many bank apps allow you to track your budget and spending habits. Being mindful about your cash flow allows for more purposeful spending.
Commit to budgeting: Budgeting your spending and saving goals can give you a better idea of how long it will take to save a specific amount. The Federal Trade Commission has a budget worksheet that accounts for savings deposits, debts, investment contributions and more.
Boost your savings: Consider low-risk savings tools, such as a CD or high-yield savings account. These types of accounts are typically free to open and earn an annual percentage yield over 3%. With some banks, you can also earn a bank bonus when opening a high-yield savings account.
Methodology
The MarketWatch Guides team analyzed regional data from the U.S. Bureau of Economic Analysis’ SAPCE2 per capita personal consumption expenditures by major type of product. Per capita personal consumption estimates are in current dollars, and values are computed from unrounded data.
*Data accurate at time of publication
See the full article on Personal Consumption Expenditures, or, read more Arizona real estate investing news. It’s your call!
