People have different ways of handling and spending their money, while certain people think eating out is utterly necessary, some other people prefer to put a little money aside for vacations to faraway places. In the end, the way you spend what you make, is ultimately your decision and your decision alone. However, when you apply for a mortgage or a large loan, financial institutions will look at certain spending ratios to determine whether you qualify. With all these facts it is important to remain within limits when spending on certain items and you should ensure that you check with your particular lender to know what these limits are precisely.

According to the U.S. Bureau of Labor Statistics Consumer Spending Survey, most American consumers spend the following amounts on the following items:

Food: 14.1%

-At home: 7.7%

-Away from home: 5.4%

-Alcoholic beverages: 1.0%

Housing: 32.9%

-This includes mortgage/rent; utilities; insurances and upkeep/maintenance.

Transportation: 19.1%

-Vehicles: 9.1%

-Gasoline: 3.3% (In 2003)

-Insurance: 6.7%

Apparel and Services: 4.0%

-The cost of new clothes, dry cleaning expenses, etc.

Healthcare: 5.9%

-Doctors, dentists, eyewear expenses; over-the-counter-medications, medical co-pays and deductibles. This does not include healthcare premiums.

Entertainment: 5.0%

-Movies, outings, vacations.

Personal Care products and Services1: 1.3%

-Haircuts, salon fees, etc.

Reading: 0.3%

-Magazine subscriptions, books, etc.

Education: 1.9%
Tobacco Products: 0.7%
Miscellaneous: 1.5%
Cash Contributions: 3.4%

-Religious tithes, charitable contributions, etc.

Personal Insurances and Pensions: 9.9%

-Health insurance premiums, 401K contributions, life insurance, disability insurance, etc.

The expenses made by each family will differ but if you find that your own spending exceeds these spending statistics then you may need to find out why you are spending excessively in one area or the other.

Some areas that may be cut, according to most financial experts include:

Transportation: if your transportation (car) costs are much higher than the 19.1% national average, you may probably own a car which is too much for your own budget. You should try and downsize to a vehicle that is a whole lot less expensive. Not only do you save money on monthly loan payments but you also save on insurance premiums, upkeep as well as gas.

Miscellaneous accounts tend to be budget killers for a lot of people. This is usually where people tend to spend the most on unnecessary items. This is also where you should tray and improve on by keeping things at least under 1.5%.

Entertainment can also be a budget buster for some people. At most times the national average is usually 5% of your annual salary, this amount usually tends to be quite excessive especially when your salary is large. While it is often fun to go out every weekend and pay the bill, you should try staying at home once in a while and have an often quieter and less expensive get together with your friends instead.

Food. A lot of Americans spend more than 14% of what they earn monthly on food despite the size of their families or rather regardless of it. More than half this amount is spent on eating out at fast food joints and restaurants. It may be a good idea to visit your grocer and eat at home in order to save yourself a lot of money.

Darren Williger is an over-caffeinated, low carbohydrate eating, winemaking enthusiast who writes for WindPurifier.com, RareStamp.com, and MarketingSuccess.biz