How Much Should Your Monthly Bills Actually Cost?
Well, the honest answer is that it depends on where you live, what you earn and how you live. That being said, there are benchmarks that can tell you fairly quickly whether something is off.
What the average household pays
Rough numbers based on BLS data and consumer surveys:
| Category | Average / month |
|---|---|
| Housing (rent/mortgage) | $1,400 - $2,200 |
| Utilities (electric, gas, water) | $200 - $400 |
| Internet & phone | $100 - $180 |
| Auto insurance | $150 - $250 |
| Health insurance | $200 - $500 |
| Groceries | $400 - $700 |
| Subscriptions | $50 - $150 |
| Transportation (gas, transit) | $150 - $300 |
So the typical total lands somewhere between $2,650 and $4,680/month before any fun money.
The 50/30/20 rule
You have probably heard of this one. It goes like this: 50% of your take-home pay goes to needs (housing, utilities, insurance, minimum debt payments), 30% goes to wants (dining out, entertainment, shopping) and 20% goes to savings (emergency fund, retirement, paying down debt).
If your bills are eating more than 50% of your take-home pay, something is probably out of balance. Keep in mind that this is a gut check and not a law. In a high cost of living city, housing alone can push you past the line and that does not automatically mean you are doing anything wrong.
Where people tend to overpay
Subscriptions are the big one. The average person has 4-5 active subscriptions, but a lot of people are sitting at 8-10 without realizing it. (That free trial you forgot to cancel has more than likely been charging you $14.99/month for half a year.) List every subscription you have and cancel anything you have not used in the last 30 days.
Insurance is the next one. Most people set up a policy once and never look at it again, but rates change constantly and loyalty does not pay. Shopping around once a year can save you hundreds.
Also, phone plans. If you are still on an unlimited plan from 2020, you are probably overpaying. MVNOs like Mint Mobile or Visible run on the same networks at more or less half the price.
Lastly, utilities. The small stuff adds up: LED bulbs, a smart thermostat, weatherstripping. Do note that some utility companies have time-of-use rates where off-peak electricity is considerably cheaper, and most people never check.
How to benchmark your own numbers
The first step is knowing what you actually spend. Not what you think you spend; what you actually spend. In my experience those are two very different numbers.
It goes like this:
- List every recurring bill with its exact amount
- Add them up to get your total monthly obligation
- Compare that total to your income and see what percentage goes to bills
- Look for outliers (any category eating more than it should)
Easier said than done when your bills are scattered across auto-pay, email reminders and paper statements. That scattering is the reason most people have never actually done this exercise.
You cannot fix what you cannot see
Just listing all your bills in one place usually reveals a surprise or two: a subscription you forgot about, a bill that went up without you noticing, a category that has quietly grown past what is reasonable.
Spendarra was built to give you exactly that visibility. Add your bills, see totals by category and watch how things change month over month. Checking in takes about 30 seconds.
So to answer the question: compare your numbers against the table above, keep needs somewhere under half of your take-home pay, and actually look at the full list once a month. That covers most of it.