With bigger tax bills coming in 2013, Americans might have to take a closer look at their spending to ensure they aren't caught off guard by the tax man.

Assuming inflation will be approximately 2.3% for 2013, we can examine the most recent expenditures from October 2012 as a proxy for a typical month of spending and use that to help forecast for 2013. Why not use November or December expenditures? Since they are major holiday months on the U.S. calendar the average expenditures will be higher than normal, and therefore not indicative of a typical month.

For 2013, Americans can expect to earn approximately $65,267.40 on average in income and, of that, the following percentages will be spent on:

1. Housing - 40.7%

2. Transportation - 17.5%

3. Food - 15.1%

4. Tobacco - 8%

5. Medical - 7.1%

6. Recreation - 6%

7. Apparel - 3%

8. Education (tuition costs) - 1.7%

We can then break down each category on a monthly basis, creating a simple illustration of what 2013's expenditures might look like.

Whether on rent or mortgages, Americans should budget about $1686.07 per month toward putting a roof over their heads. With this comes about $212.12 a month for utilities. For furniture and other home goods, Americans will spend approximately $179.49 per month on decorating and sprucing up their homes.

On average, Americans will spend the bulk of their transportation budget on driving a car, maintaining it and paying for the fuel at $658.11 a month. Public transportation comes in at less than a tenth of that amount averaging only $65.27 a month to take the bus or subway.

Americans can expect to spend about $821.28 per month on food. Of this, about $462.31 of that budget will likely be going toward groceries and $310.02 on restaurants. The rest of will go toward coffee and other drinks at $48.95 a month.

An average of $163.17 per month will go toward paying medical professionals, such as doctors and dentists. Add to this another $87.02 per month for prescription medications. The remainder of the medical budget works out to $135.97 per month, which presumably will go toward health insurance.

Entertainment and Recreation
On television and music, you can expect to spend approximately $326.34 a month. Coming in at approximately a third of that figure, you can add $92.46 per month, which can be spent on other recreational activities, such as movies or concerts. The two lowest expenses for recreation and entertainment are sports at $27.19 a month, and books, magazines and newspapers, which average $10.88 per month.

Clothes, School and More
Apparel will average at about $163.17 a month, college education comes in at $92.46 a month, and lastly, smokers can expect to see a whopping $435.12 go up in smoke each month, which is nearly equal to the monthly budget for groceries.

There is also approximately $587.41 a year (or $48.95 a month) that's unaccounted for in the categories listed above. This equates to 0.9% of the average annual income. We can categorize these expenditures under miscellaneous expenses.

In addition to the typical monthly expenditures for 2013, Americans are expected to put only about 4% of their income toward retirement, which is less than half of the 10% that most financial advisors suggest is the minimum amount.

The Bottom Line
It goes without saying that your expenditures will have some variance from the average American as depicted above. You may spend more or less, though it makes sense at the start of this new year to take a closer look at where you are spending your money by tracking your expenses and figuring out where you can trim fat from your monthly budget. Though a small expenditure might not seem like a lot at the time, if it's done frequently and impulsively it can add up to a large sum by the end of the year. Consider that the money going to these expenditures might be better put toward savings that can grow in your bank account.

Related Articles
  1. Stock Analysis

    Under Armour's Plan to Double Revenue

    Learn how Under Armour plans on doubling its revenue by 2018. Find out what areas the company plans to count on for this growth and its record streak.
  2. Stock Analysis

    The Biggest Risks of Investing in Sears Stock

    Learn about the factors that have led to Sears Holdings' underperformance the past several years and where the ailing retailer could be heading in the future.
  3. Taxes

    Internet Sales Tax Vs. Brick & Mortar Sales Tax

    Learn about the differences between sales taxes and Internet sales taxes, and the goods and services that typically incur each type of tax.
  4. Entrepreneurship

    How an Internet Sales Tax Will Affect Your Small Business

    Learn about how the Marketplace Fairness Act may impact small business owners should it pass in the House and what the act requires from business owners.
  5. Stock Analysis

    4 Key Indicators That Move The Markets

    Educated investors need to keep their finger on the pulse of the economy, and watching certain indicators is a good way to do that.
  6. Savings

    Craft Beer Clubs – Bargain or Not?

    If you're an aficionado of artisanal brews (or would like to be), a beer club can be a palate-pleasing, albeit pricey, way to expand your hops horizon.
  7. Savings

    A Quick List of FSA Eligible Expenses

    The ABCs of FSAs: What you can and can't use your Flexible Spending Account funds for.
  8. Financial Advisors

    Breaking Down Medicare Open Enrollment for Clients

    For financial advisors, open enrollment is an important opportunity to be of service to clients, especially when it comes to reviewing Medicare options.
  9. Stock Analysis

    When Will Dick's Sporting Goods Bounce Back? (DKS)

    Is DKS a bargain here?
  10. Stock Analysis

    Has Urban Outfitters Lost its Way? (URBN)

    Urban Outfitters just made a bold move. Will it pay off?
  1. Does QVC accept debit cards?

    QVC accepts debit card payments as one of its many payment options. The company, which is the world’s leading video and e-commerce ... Read Full Answer >>
  2. Are Flexible Spending Account (FSA) contributions tax deductible?

    The contributions you make to your Flexible Spending Account (FSA) are not tax-deductible because the accounts are funded ... Read Full Answer >>
  3. Does a Flexible Spending Account (FSA) cover Lasik?

    Flexible spending accounts (FSA) can be used to pay for qualifying LASIK procedures. LASIK is not the only laser eye surgery ... Read Full Answer >>
  4. Are Flexible Spending Account (FSA) expenses tax deductible?

    Flexible Spending Account (FSA) expenses are not tax deductible. The U.S. Internal Revenue Service (IRS) states you cannot ... Read Full Answer >>
  5. Does a Flexible Spending Account (FSA) cover acupuncture?

    A Flexible Spending Account (FSA) covers acupuncture. The Internal Revenue Service (IRS) has defined acupuncture as a qualifying ... Read Full Answer >>
  6. Do Flexible Spending Accounts (FSAs) expire?

    Flexible Spending Accounts (FSAs) do expire and are considered to be a "use it or lose it" type of plan. They are savings ... Read Full Answer >>

You May Also Like

Trading Center