The average American spends 17 weeks paying off taxes and their worries don't stop there. One can dispute the information gathered by the Tax Foundation (www.taxfoundation.org), but nevertheless the main conclusion we find is that the average American isn't saving much of anything at all.
Let's put this in perspective. Between Federal, State, and Local taxes we're already 17 weeks in to our 52 week year. That's the beginning of May and we have yet to pay any of our living expenses. Another 9 weeks is spend trying to put a roof over our heads which puts us solidly halfway through the year. By those numbers if you're making $40,000 a year we just accounted for $20,000.
Transportation is a relative necessity as not much of those costs are extraneous. We're now at the beginning of August with $3,287 going to transportation. If we assume $600 for insurance and $100 per month car payments and gas at $3.00 a gallon on a car getting 30 mpg that's almost 15,000 miles a year driven. Sounds like a pretty solid number to me. Although we can see that having your car paid off will help you save a good deal of money.
Food puts us into the beginning of September with another $3300 or so accounted for. That's spending $9 a day so you can see there's not much eating out going on here. To attain this value, for every time you plunk down $20 for a meal you'll be spending many days eating in to keep that daily value down.
Most of us are young so we don't have the high medical costs this chart suggests, but we can see that more of our money goes to entertainment than that chart suggests.
You'll probably notice a category that is really missing here: SAVINGS!
Since the average marginal propensity to save for Americans is actually negative, the average American isn't saving anything. Remember the 10% rule of savings for retirement says that you have to sock away 10% of your income without fail every year to live off of 80% of your income. Of course if you start later than your mid 20's that percentage you have to save every year goes way up!!!