Average American Car PaymentLast weekend praying up in the Mountains, God hit me with this question, so I started first thing Monday morning to try and back into an affordable Budget towards personal transportation based on the average American household income and expenses. As I began my research I couldn’t help but note the lack of anything like this out there and the average budget numbers available anywhere I could find were totally unworkable with current 2016 costs, especially health insurance and health care costs. The results below literally blew my mind and I bet they will yours as well.

All the sources for information are in the links below  indicated by (*) asterisks. Much work went into finding something that appeared true and reliable based in part on my own experience.

Yearly Average Household Income  $53,657 *

After Taxes                                           $37,560 **

Housing:                      $11,400  30%   National Average Mortgage Payment (Yearly)   ***

Health Insurance:    $8,724   23%   National Average (Yearly)(without employer subsidy)   *****

Food:                               $7,368   20%  National Average Household Moderate Cost Plan (Yearly)   ****

Utilities:                        $5,109    14%   National Average (below) ###                                        

Health Care:                 $2,089    6%    National Average household (Yearly)    **********

If you were now to tithe or save 10% of the Net $3,756 you would be over budget  ($886) That’s before you spent a penny on:

Apparel & Services      $2,100   6%   National Average (Yearly)   ***********

Entertainment              $2,728   7%   National Average (Yearly)   ************

Which leads me to my original question how much can the Average American afford for personal transportation since we know in that  the Average American household has 1.9 cars driving 15k miles a piece the gas,  insurance and maintenance alone look like this.

Yearly Gas: $3,300 Yearly Car Insurance: $1,920 Yearly Maintenance $800

Total  $6,020  16% (1.9 cars times 15k miles at 20mpg $2.20 a gallon two 9 year old cars at $400 a piece maintenance)

We are now ($11,734) over our take home income and we still have not included any car payment or lease payment or depreciation if you own your cars outright….

The Answer: The average American household can not afford a car.

*******Additional Note:  There is no debt payments in this example and the Average American pays $2,268.  6% of their total budget on credit cards alone if they just pay the minimum..

What Should we do budget wise?  Read: Average American Car Budget Plan 2016

What’s Really going on with these numbers? Read: Greedonomics 101


Electric                                                                         $1,369 4%  National Average (Yearly)  ******                                                                            

Water & Sewer                                                            $480  1%  National Average  (Yearly)      *******

Cell Phone                                                                $2,060  6%  National Average  2 phones  (Yearly)    ********                                              

 Cable/Sat TV                                                          $1,200  4%   National Average (Yearly)  *********

* http://www.deptofnumbers.com/income/us/

** http://www.youcandealwithit.com/borrowers/calculators-and-resources/calculators/budget-builder.shtml

*** http://peopleof.oureverydaylife.com/average-mortgage-payment-1030.html

**** http://www.cnpp.usda.gov/sites/default/files/CostofFoodMay2016.pdf

***** https://resources.ehealthinsurance.com/affordable-care-act/much-health-insurance-cost-without-subsidy

****** http://www.eia.gov/electricity/sales_revenue_price/pdf/table5_a.pdf


******** http://www.consumerreports.org/cro/magazine/2015/02/how-to-save-money-on-your-cell-phone-plan/index.htm

********* http://www.nbcnews.com/business/business-news/cable-satellite-tv-costs-will-climb-again-2016-n484531

********** http://www.healthcostinstitute.org/files/2014%20HCCUR%2010.29.15.pdf

*********** https://www.irs.gov/businesses/small-businesses-self-employed/national-standards-food-clothing-and-other-items

************ http://www.bls.gov/news.release/cesan.nr0.htm