Visual Capitalist Takes On Personal Finance With New Project
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Personal Finance

Visual Capitalist Takes On Personal Finance With New Project

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There’s no doubt that financial decisions have a crucial impact on our lives.

Everyone should have access to knowledge on how to save money, buy a home, make smart purchases, and build a robust portfolio of investments. This information can be dry at times, but it can also be the difference between being living month-to-month and achieving financial independence.

Yet statistics show that only about 16.4% of high school grads were required to take a course on personal finance, and problems go far deeper than that. Right now, financial literacy is dropping around the globe – and even worse, a record-high amount of debt is weighing younger generations down.

Introducing Wealth 101

Today we’re proud to announce our partnership with U.S. non-profit Next Gen Personal Finance, which specializes in offering free personal finance resources for teachers and students.

Together, we’ve created Wealth 101, an educational resource that will feature regular infographics on how to make responsible financial decisions:

About Wealth 101

Wealth 101 is the personal finance course you’ve always deserved. Using powerful infographics and data visualizations, it will be updated regularly to build out a compelling base of lessons for people of all ages and backgrounds.

Wealth 101 infographics can all be accessed at http://wealth.visualcapitalist.com

(These infographics will also be posted on the regular Visual Capitalist site, as well.)

To start, here are our first two infographics for the project.

The first deals with the problem of financial literacy, while the other showcases the financial concepts that we’ll be addressing as we build out Wealth 101.

The Financial Literacy Problem

Financial literacy has been dropping for years. This giant infographic shows why that’s a problem, and what we can do to make future generations more prepared:

The Personal Finance Landscape

This personal finance wheel covers the most important concepts you need to know in order to gain financial independence:

Click on the above previews to see the full infographics.

Lastly, we appreciate your support as we continue to build out this resource!

Founding Partners

Next Gen Personal Finance

NGPF is a free high-school personal finance curriculum and professional development partner helping teachers deliver essential money understanding in an easy-to-grasp, engaging way.

Visual Capitalist

Visual Capitalist is a leading financial media site that creates and curates enriched visual content focused on emerging trends in business and investing.

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Personal Finance

How Do Americans Spend Their Money, By Generation?

This interactive graphic shows a breakdown of how average Americans spend their money, and how expenses vary across generations.

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Annual Expenditure in the U.S. by Generation

How Americans Spend Their Money, By Generation

In 2021, the average American spent just over $60,000 a year. But where does all their money go? Unsurprisingly, spending habits vary wildly depending on age.

This graphic by Preethi Lodha uses data from the U.S. Bureau of Labor Statistics to show how average Americans spend their money, and how annual expenses vary across generations.

A Generational Breakdown of Overall Spending

Overall in 2021, Gen X (anyone born from 1965 to 1980) spent the most money of any U.S. generation, with an average annual expenditure of $83,357.

GenerationBirth Year RangeAverage Annual Expenditure (2021)
Silent1945 or earlier$44,683
Boomers1946 to 1964$62,203
Generation X1965 to 1980$83,357
Millennials1981 to 1996$69,061
Generation Z1997 or later$41,636

Gen X has been nicknamed the “sandwich generation” because many members of this age group are financially supporting both their aging parents as well as children of their own.

The second biggest spenders are Millennials with an average annual expenditure of $69,061. Just like Gen X, this generation’s top three spending categories are housing, healthcare, and personal insurance.

On the opposite end of the spectrum, members of Generation Z are the lowest spenders with an average of $41,636. per year. Their spending habits are expected to ramp up, especially considering that in 2022 the oldest Gen Zers are just 25 and still early in their careers.

Similarities Across Generations

While spending habits vary depending on the age group, there are some categories that remain fairly consistent across the board.

One of the most consistent spending categories is housing—it’s by the far the biggest expense for all age groups, accounting for more than 30% of total annual spending for every generation.

GenerationAverage Spend on Housing (2021)% of Total Spend
Silent (1945 or earlier)$16,65637.3%
Boomers (1946 to 1964)$21,27334.2%
Generation X (1965 to 1980)$26,38531.7%
Millennials (1981 to 1996)$24,05234.8%
Generation Z (1997 or later)$15,44937.1%

Another spending category that’s surprisingly consistent across every generation is entertainment. All generations spent more than 4% of their total expenditures on entertainment, but none dedicated more than 5.6%.

GenerationAverage Spend on Entertainment (2021)% of Total Spend
Silent (1945 or earlier)$2,0274.5%
Boomers (1946 to 1964)$3,4765.6%
Generation X (1965 to 1980)$4,6945.6%
Millennials (1981 to 1996)$3,4575.0%
Generation Z (1997 or later)$1,6934.1%

Gen Zers spent the least on entertainment, which could boil down to the types of entertainment this generation typically enjoys. For instance, a study found that 51% of respondents aged 13-19 watch videos on Instagram on a weekly basis, while only 15% watch cable TV.

Differences Across Generations

One category that varies the most between generations and relative needs is spending on healthcare.

As the table below shows, the Silent Generation spent an average of $7,053 on healthcare, or 15.8% of their total average spend. Comparatively, Gen Z only spent $1,354 on average, or 3.3% of their total average spend.

GenerationAverage Spend on Healthcare (2021)% of Total Spend
Silent (1945 or earlier)$7,05315.8%
Boomers (1946 to 1964)$6,59410.6%
Generation X (1965 to 1980)$5,5506.7%
Millennials (1981 to 1996)$4,0265.8%
Generation Z (1997 or later)$1,3543.3%

However, while the younger generations typically spend less on healthcare, they’re also less likely to be insured—so those who do get sick could be left with a hefty bill.

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Personal Finance

Mapped: The Salary You Need to Buy a Home in 50 U.S. Cities

Is owning a home still realistic? This map lays out the salary you’d need to buy a home in 50 different U.S. metro areas.

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This is the Salary You Need to Buy a Home in 50 U.S. Cities

Depending on where you live, owning a home may seem like a far off dream or it could be fairly realistic. In New York City, for example, a person needs to be making at least six figures to buy a home, but in Cleveland you could do it with just over $45,000 a year.

This visual, using data from Home Sweet Home, maps out the annual salary you’d need for home ownership in 50 different U.S. cities.

Note: The map above refers to entire metro areas and uses Q1 2022 data on median home prices. The necessary salary was calculated by the source, looking at the base cost of principal, interest, property tax, and homeowner’s insurance.

Home Ownership Across the U.S.

San Jose is by far the most expensive city when it comes to purchasing a home. A person would need to earn over $330,000 annually to pay off the mortgage at a monthly rate of $7,718.

Here’s a closer look at the numbers:

RankMetro AreaMedian Home PriceSalary Needed
#1San Jose$1,875,000$330,758
#2San Francisco$1,380,000$249,685
#3San Diego$905,000$166,828
#4Los Angeles$792,500$149,127
#5Seattle$746,200$140,768
#6Boston$639,000$130,203
#7New York City$578,100$129,459
#8Denver$662,200$121,888
#9Austin$540,700$114,679
#10Washington, D.C.$553,000$110,327
#11Portland$570,500$109,267
#12Riverside/San Bernardino$560,000$106,192
#13Sacramento$545,000$105,934
#14Miami$530,000$103,744
#15Salt Lake City$556,900$100,970
#16Providence$406,700$88,477
#17Phoenix$474,500$86,295
#18Las Vegas$461,100$84,116
#19Raleigh$439,100$83,561
#20Dallas$365,400$81,165
#21Orlando$399,900$79,573
#22Chicago$325,400$76,463
#23Tampa$379,900$75,416
#24Houston$330,800$74,673
#25Minneapolis$355,800$74,145
#26Baltimore$350,900$73,803
#27Nashville$387,200$73,502
#28Jacksonville$365,900$73,465
#29Hartford$291,000$73,165
#30Charlotte$379,900$72,348
#31San Antonio$321,100$70,901
#32Atlanta$350,300$69,619
#33Philadelphia$297,900$69,569
#34Richmond$354,500$68,629
#35Milwaukee$298,800$65,922
#36Kansas City$287,400$60,507
#37Columbus$274,300$59,321
#38Virginia Beach$289,900$59,245
#39New Orleans$281,100$57,853
#40Birmingham$289,500$55,662
#41Indianapolis$271,600$53,586
#42Memphis$259,300$52,691
#43Cincinnati$244,300$51,840
#44Buffalo$202,300$51,525
#45Detroit$224,300$50,302
#46St Louis$216,700$48,988
#47Louisville$235,400$48,121
#48Cleveland$192,700$45,448
#49Oklahoma City$198,200$45,299
#50Pittsburgh$185,700$42,858

Perhaps surprisingly, Boston residents need slightly higher earnings than New Yorkers to buy a home. The same is also true in Seattle and Los Angeles. Meanwhile, some of the cheapest cities to start buying up real estate in are Oklahoma City and Cleveland.

As of April, the rate of home ownership in the U.S. is 65%. This number represents the share of homes that are occupied by the owner, rather than rented out or vacant.

The American Dream Home

As of the time of this data (Q1 2022), the national yearly fixed mortgage rate sat at 4% and median home price at $368,200. This put the salary needed to buy a home at almost $76,000⁠—the median national household income falls almost $9,000 below that.

But what kind of homes are people looking to purchase? Depending on where you live the type of home and square footage you can get will be very different.

In New York City, for example, there are fairly few stand-alone, single-family houses in the traditional sense⁠—only around 4,000 are ever on the market. People in the Big Apple tend to buy condominiums or multi-family units.

Additionally, if you’re looking for luxury, not even seven figures will get you much in the big cities. In Miami, a million dollars will only buy you 833 square feet of prime real estate.

One thing is for sure: the typical American dream home of the big house with a yard and white picket fence is more attainable in smaller metro areas with ample suburbs.

Buying vs. Renting

The U.S. median household income is $67,500, meaning that today the typical family could only afford a home in about 15 of the 50 metro areas highlighted above, including New Orleans, Buffalo, and Indianapolis.

With the income gap widening in the U.S., the rental market remains a more attractive option for many, especially as prices are finally tapering off. The national median rent price was down nearly 3% from June to July for two-bedroom apartments.

At the end of the day, buying a home can be an important investment and may provide a sense of security, but it will be much easier to do in certain types of cities.

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