We spend a lot of time analyzing our short-term budgets—how much we need to save this month to pay the electricity bill and whether we can afford to go out to eat on Saturday. But how much time do we spend considering our lifetime budget—how much money we’ll shell out throughout our lives?
Mortgages, education, birthday gifts, coffees to go—they’re all part of our lifetime expenses. For some, thinking about how much money the average person spends in a lifetime can feel overwhelming. Others may find comfort in knowing what to expect so they can budget accordingly.
Below, we’ll break down the most significant expenses and show you the average money spent in a lifetime.
Note that our estimates are approximate and average lifetime spending varies widely by individual.
Key Takeaways
- Studies say the average amount of money spent in a lifetime is over $3.3 million per person.
- Major life-long expenses include housing, healthcare, transportation, education, and daily living costs.
- The cost of comfort and luxury quietly add up over the years, and even small changes in daily spending can make a big difference in savings over time.
- Inflation, economic changes, and unplanned expenses like medical bills or car repairs can throw your budget off course.
- Spending habits differ widely based on income, location, and lifestyle.
Understanding Lifetime Spending and Its Impact
America has a spending problem — or should we say, an affordability problem. Over 66% of Americans feel they’re living paycheck to paycheck while trying to afford rising costs. According to recent spending data, some of this is out of our control, as there is a significant gap between the average American income and our total expenses.
According to a new study by OneMain Financial, the average American spends over $3.3 million in their lifetime. If we were to use the annual consumer expenditures calculated by the Bureau of Labor Statistics, an American who lives to age 76 would spend $3.64 million over the course of 50 years—not accounting for inflation, of course.
Lifetime spending that tops several million is a reasonable number, in theory. The only problem is that our average lifetime earnings are far less than that. The BLS reports the median annual wage for total occupations in the United States is $65,470 as of May 2023. Multiply that by 40 years, and the lifetime earnings reach just $2.62 million.
The growing gap between our lifetime earnings and how much we spend is a significant cause of concern. So how does one make do?
It’s not enough to cut out small luxuries, such as dinners out, trendy concert tickets, or new school outfits; you need to understand the importance of family financial planning. This starts by envisioning your major and minor expenses.
Major Expenses in a Lifetime
While housing costs are the predominant lifetime expense, there are other significant costs to consider.
Housing Costs
Housing is one of the most significant expenses for most Americans, with mortgages accounting for nearly half of lifetime spending. In July 2024, the median sale price of a U.S. home reached $429,800, while the average 30-year fixed mortgage rate stood at 6.85%.
In this scenario, a homebuyer who secured a mortgage loan with no money down would pay roughly $1,013,870 over the life of the loan.
Renters aren’t spared, either. Housing could easily take up most of their budget, with home prices and rents rising faster than wages.
Healthcare
The cost of staying healthy is creeping higher, from insurance premiums to prescription drugs. According to our calculations, Americans spend an average of $387,426 on healthcare from ages 26 to 65, although this varies depending on location, employment status, age, and health.
Even with employer-sponsored insurance, out-of-pocket costs can be crippling, especially as people age.
- Health insurance premiums: $328,965
- Prescription drugs: $12,285
- Medical services: $46,176
Education
Education isn’t just powerful but now a significant financial burden. According to the College Board, the average cost to attend a four-year university is between $45,040 and $116,600, depending on whether they opt for an in-state or out-of-state education. Many seek out student loans to cover this cost and end up paying more in interest.
The average student borrower pays more than $2,100 in interest each year and takes roughly 20 years to pay off their loans.
Transportation
The average American will drive 10 to 12 cars in their lifetime. With the average price of a new car hovering around $47,400, you’d spend between $474,000 and $568,800 on cars while driving. This does not include maintenance costs, gasoline, and minor upgrades.
You’ll also need to factor in the cost of car insurance, which ranges between $957.96 and $1,887.24 per year.
Food
Filling your belly is no small feat, either. Eating out can save you time and convenience, but it’s also a sneaky drain on your monthly food budget. The cost of homemade foods is rising, too.
Americans spend $9,343 per year on their food supply ($5,703 on groceries and $3,639 on food away from home). That’s a big hit to the wallet, especially when dining out often becomes a habit instead of an occasional treat.
Minor Expenses Throughout Your Lifetime
When calculating how much money you’ll spend in a lifetime, it’s essential to include those minor daily living expenses that will add up over time. Here are a few common ones:
- Vacations: A recent study found that a week-long holiday for one person costs just under $2,000. If you take one trip per year, you’ll spend about $100,000 on vacations over the next 50 years — or more once you account for transportation, vacation entertainment, and travel partners.
- Entertainment and leisure: Paid concert tickets, streaming subscriptions, date nights, and movies are all activities that improve our well-being but wreak havoc on our budgets.
- Self-care and clothing: Buying quality clothes and prioritizing self-care are important to your health and well-being, but these purchases also significantly contribute to your lifetime spending.
Unexpected Expenses to Budget For
Life is full of surprises, and unexpected expenses you didn’t plan for can throw even the most well-planned budget into chaos. Adding a contingency budget to your savings plan can help ensure you can cover pop-up expenses, such as:
- A wedding: Saying “I do” to the love of your life isn’t cheap; the average cost of a wedding in the U.S. is just over $30,100.
- Birth of a child: The cost of giving birth amounts to $18,865, including prenatal care, hospital delivery bills, and postpartum care. Those with large-group health insurance will pay roughly $2,850 out of pocket.
- Pet expenses and vet bills: The average U.S. household spends $770 per year on pets. Many are opting to pay for pet insurance to cover the rising costs of vet bills.
- Funerals: Expenses such as funeral services, burial plots, and other arrangements are costly, with funeral prices averaging between $7,000 and $12,000.
- Home repairs and upgrades: Emergency home repairs and necessary upgrades, like replacing a roof, swapping an appliance, or renovating a bathroom, can add thousands to your lifetime budget. For example, Americans spent roughly $22,000 on their homes in 2022.
- Medical emergencies: Even with insurance, unexpected health issues can lead to high out-of-pocket expenses.
Comparing Lifetime Spending Across Demographics
How much people spend over their lives varies greatly depending on their situation. A few factors that shape lifetime spending include:
- Income levels: Those with higher incomes spend more overall but often direct their money toward investments, education, and travel.
- Geographical locations: The location influences the cost of living, from housing and taxes to grocery costs.
- Family structure: Families with children spend more on housing, healthcare, education, and emergencies than individuals or couples without kids.
- Lifestyle choices: Habits like smoking or drinking can drive up expenses over time compared to more conservative lifestyle choices.
With lifetime earnings and spending rarely aligning, it’s important to understand your potential expenses now and in the future. The average money spent in a lifetime is likely higher than you think—at least $3 million. So whether it’s how to stop spending money on unnecessary things or set clear financial goals, staying on top of your budget will make a real difference in your quality of life.