Americans can save a total of $5,339.35 per year on average by cutting down unnecessary expenses, a new report said.
Purchasing non-essential things such as coffee breaks, clothing, eating out, entertainment, alcohol, and ride shares can cost Americans as high as $5,000, GoBankingRates found.
Even though the costs differ across the country, takeout and food delivery totalled more than $2,000 a year on average, the personal finance site reported. New clothing and accessories can amount to roughly $750. Buying coffee in a store or on the go added up to more than $700 every year. Ride shares like Uber and Lyft also cost Americans nearly $1,000 a year on average.
Other expenses such as entertainment tickets and alcohol, each valued at around $350 a year, on average.
Since many households spend more than 100% of their income after taxes on monthly expenses, slashing these extra costs is the way to make substantial savings.
To control their spending, Mark Avallone, Potomac Wealth Advisors president and author of “Countdown to Financial Freedom,” advised Americans to be more mindful on their financial activities every day.
The report also showed millennials as the biggest spender among all generations, with their penchant for buying clothing and eating out. Younger Gen Xers, currently aged 35 to 44, spent more on housing and groceries. Meanwhile, older Gen Xers, those between the ages of 45 and 54, used their money mostly on utilities. Older baby boomers, aged 65 and over, spent heavily on health insurance, which averages almost $13 per day.
Another study, this time by The Pew Charitable Trusts, found that families nowadays have tighter budgets than before. Household spending has surged 25% or more in the past 20 years even as incomes have not increased as much.
Moreover, an earlier Pew survey found that 1 in 3 U.S. families have no savings.