Save. Spend. Splurge.

The Poor versus The Rich: Spending Habits

It goes without saying that 5% of a budget varies greatly, so here are some numbers to keep in mind:

  • 5% of $150,000 = $7500
  • 5% of $70,000 = $3500
  • 5% of $20,000 = $1000

The percentages spent from their budget look fairly similar, until you get to these two categories:

  • Saving for Retirement at 15.9% for the Rich versus 2.6% for the Poor
  • Education at 4.4% for the Rich versus 1.5% for the Poor

Source: Consumer Expenditures Survey

It is also no surprise to me that the Poor spend the most amount of money on Food At Home, and the Rich spend the least (although the Rich’s “least” spent is $8100/year or $675/month).

Although I daresay it isn’t such a bad thing for the Poor to eat at home, they are most certainly not able to spend their meager grocery budget on organic, fresh foods, which I suspect is where the difference is in those food budgets between the Poor and the Rich.

Everything just costs so much more for the Poor in terms of how much it eats up of their budget just to cover the basics.

Where can you really afford to cut in such a budget?!

And I used the highest income for the Poor at $20,000 versus $15,000!

How much they spend as a dollar amount


The totals don’t add up to 100%, but the authors noted that there were discrepancies.

Now for some analysis!

Top 3 categories of where they spend


Housing and Transportation and Gas are the two most common categories.

The poor have to prioritize utilities over other parts of the budget, but the Middle Class and Rich save quite a bit for retirement in comparison.

What their monthly budget looks like


The amounts are easier to understand when they’re broken down by month.

The Rich put approximately $1350/month of food into their mouths each month, which is almost the entire monthly budget of the Poor.

For the Rich, they are spending almost 12X more on average versus the Poor (multiplier ranges from 4X to 45.8X more).

The biggest multiplier is the Retirement for the Poor at $43.33 dollars a month versus the Rich at $1987.50 a month which means they are saving 45.8X more a month.

Biggest spending gaps: Education & Retirement

The rich save 6X more than the poor for retirement and 3X more on education than the poor.

This obviously translates into the next generation and onwards, because if your child knows more than the next, or goes to a better school, they get into a better job, and continue to pay it forward for generations to come.

The education gap is real, and it is huge when it comes to the rich versus the poor.

Imagine starting in a class where children haven’t even seen a book in their lives? Or that they are just learning the alphabet?

Versus another school where the children are already learning how to spell basic words at the same age?

Starting from age 5 until 18, that education gap compounds exponentially, and you can’t ever really catch up from that if your start is so far below – but it isn’t impossible of course.

My partner came from the poorest of the poor background, and so did my mother. They both reached a level of education that was unheard of in their group/families at that time.

What did you think about the numbers above?


  • Mochi & Macarons

    Perhaps, but the percentages are also based on different salaries.

    Clothes and shoes:

    Poor = $720/year
    Rich = $5500/year

    They have more than 5X for that budget as ‘Rich’.

    I was thinking about the opposite… that if the poor can spend only $720/year, it means the Rich could spend less!

  • fabulously frugirl

    I really like how you broke everything out and commented on the dollar value, as opposed to just the percentage of income. In a way, this information shows that there is truly even more of a gap between the rich and the poor – and it’s very difficult to break the cycle of poverty.

    • Mochi & Macarons

      I can only judge things once I see them in $. Otherwise, as percentages, it’s interesting for a general overview, but not indicative of the actual spending.

  • SWR

    First observation: that state map is a bit misleading – there are even more areas of the country that should be shaded navy (Chicago and Atlanta jump to mind). Second, $20,000 is a strange income to choose. At $20,000 is a strange number to calculate this on. In most states that’s too much for two people to be eligible for food stamps. (Unless we’re talking a mother and young child.) The difference in educational spending is really what’s sticking with me- “cyclic poverty” really comes to mind based on that number alone.

    • SWR

      Bah- wrote this quickly and forgot to edit!

    • Mochi & Macarons

      That state map comes from data that they collected — do you have another map with data that says that Atlanta and Chicago are supposed to be darker?
      What’s the income for food stamps??

      I chose $20K in the higher range because they put it at $15,000 – $19,999

      • SWR

        I don’t have another map; it’s just that Chicago and Atlanta are two examples of expensive metros in states with relatively low costs of living.

        It varies by state, but in mine you’re eligible for the full amount ($200 for an individual) up to about $13,000/year. For two people, it’s $18,5000.

        • Mochi & Macarons

          Hmm.. Maybe they used 2 people in a household for the food stamps? Even so, it doesn’t reach $19,999.

          But maybe it’s not a food stamp category, but more of just a “poor” category.

  • tomatoketchup

    I think the key to increasing one’s financial stability is minimal to moderate increases in lifestyle expenses whenever large increases in income occur.

    My annual income more than tripled a few years ago putting me comfortably in the rich category according to your chart above, but my living expenses only went up by maybe 25% with all the rest going to retirement and travel. I can’t fathom how a person can spend $8000 a year eating at restaurants. I still eat the same food I ate when I had a more modest income, mainly because I don’t want to get fat.

    Someone in the “poor” category doesn’t really have too many options except to find a way to climb the social ladder and make a better income.

    • Mochi & Macarons

      Ditto. My income had gone up significantly since I started working.

      Now, I just work less, make a decent amount of money, save it (at least, I try my best to stay down at the levels I was before), and try to be moderate in my life…..

      Although I was thinking the other day that it wasn’t very moderate or normal for most people under 30 to be taking off so much time to travel and do whatever they want instead of working like crazy to save.

      My priorities lie elsewhere, I suppose.

      I feel like I can always make more money, but my youth and all the time I’m given now (pre-children), can never be saved to use later.

      I think in the poor category, it’s also a mindset thing. They might feel defeated in such an income bracket, and not know how to climb out of it. It’s a vicious cycle…

  • Cassie

    I was looking at the middle class column thinking I was doing pretty good in all categories until I realized this was $70,000 after tax, not before. Oops. My housing costs are significantly out of whack from this infographic, but that’s to be expected. If I was paying the mortgage payments required by the lender, I’d be 3% over the average for middle class. Instead I’m paying my mortgage accelerated biweekly, with an extra 20% on the principal, so I’m actually around 38.5%. I’m also high on the retirement end, with 15.6% of my after tax money going into retirement accounts. Everything else I’m low on, especially the transportation costs. Even if I was to buy a new car, I’d still be below average. That being said, this is for a family, and I’m just an individual.

    I’m surprised they don’t have a column for non-retirement savings.

    • Mochi & Macarons

      I also found it odd they didn’t have a NON-retirement savings section, but perhaps they just assume that if you are able to save outside of retirement because it’s all maxed, there’s really no point in counting it as an expense.

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