No one ever said being an adult was easy, or inexpensive.

If there's one fairly steady theme over the past couple of decades, it's that consumers are saving less of their income and their household budgets are being pushed to the limit. According to the St. Louis Federal Reserve Bank's February data, the personal saving rating in America was a paltry 5.6%. Comparatively, U.S. workers were socking away more than 12% of their paycheck 50 years ago.

At the same time, a number of common expenses that households deal with have largely outpaced the inflation rate and wage growth. Some good examples include healthcare costs, college expenses, and in recent years housing costs, since home prices have advanced well ahead of the inflation rate, as a whole, since the mid-1990s.

A young couple showcasing their empty wallet.

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Four spending categories account for a majority of household expenses

Yet, interestingly enough, education costs and medical care expenses aren't among the average American's top expenditures, according to 2013 data from the Bureau of Labor Statistics aggregated by ValuePenguin. Of the 15 broken-down categories that described the average household's spending, healthcare spending comes in eighth at 6%, while education expenses rank 12th at 2%.

However, the top four spending categories wound up eating up more than half (53%) of the average American household's budget in 2013.

1. Housing costs (16%)

It probably comes as no surprise that housing costs, such as a mortgage or rent payment, make up the biggest portion of the average household's budget at 16%. Housing costs have handily outpaced the rate of inflation over the past two decades. Thankfully, current and prospective owners have been blessed with eight years of well-below-average mortgage rates, which is a direct result of the Federal Reserve's mostly dovish monetary policy.

Still, it's important to realize that you may be able to lower your housing costs, especially if you're a homeowner. For instance, if you can afford to refinance to a 15-year mortgage from a 30-year, or buy a house with a 15-year mortgage instead of a 30-year, you're liable to net a pretty substantial interest rate discount that could save thousands or tens of thousands of dollars over the lifetime of your loan. Yes, it means higher upfront monthly payments, but it reduces the long-term cost of your home loan.

A real estate agent handing a miniature house over to a buyer after signing paperwork.

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Keeping a close eye on your credit report can help, too. Maintaining a good or excellent credit score allows you to receive the best mortgage rates possible. Checking your credit report once annually at AnnualCreditReport.com can ensure that no errors have worked their way onto your report at any of the three reporting credit bureaus. If you do find and correct an error, it could mean an instant boost to your credit score and potentially a better lending rate.

Renters who aren't prone to moving often should also give serious consideration to buying a home. A July 2016 report from GoBankingRates found it to be cheaper to buy a home than rent a home in 42 of the 50 states. You should examine the health of the housing market in your area to determine if owning a home would allow you to save more each month. 

2. Transportation expenses (14%)

The average American household is also paying quite a bit of its income toward transportation expenses, which includes gasoline, auto loan payments (since a good number of Americans are paying back what now amounts to more than $1 trillion in outstanding auto loans), public transportation expenses, and vacation travel costs.

The two easiest ways to cut average transportation costs are pretty straightforward: consider public transportation and run the math on whether a new vehicle is right for you.

A car made out of hundred-dollar bills.

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Last August, the American Public Transportation Association's Transit Savings Report showed that a two-person household who gave up their car and commuted by public transportation instead would save an average of $803 per month, or $9,634 annually. That would cover every last cent, and then some, of what the average American household had spent on transportation costs in 2013.

Consumers should also dig into whether or not it makes sense to pony up extra cash for a new vehicle, or one that's green, such as a hybrid or electric vehicle. The idea of plugging in as opposed to pumping gas might sound attractive economically, but electric vehicles often have a large pricing premium over gas-powered cars. A 2015 report by the Energy Information Administration found that it could take well over a decade for a consumer to be paid back in pump-price savings the extra amount they paid to buy an electric vehicle.

Long story short, run the math and see if purchasing a car (be it green or not) makes sense financially for you before taking the plunge.

3. Taxes (12%)

You knew it was coming! The average American household hands over 12% of its income to pay personal taxes. It should be noted that this 12% doesn't include property tax, sales tax, or FICA taxes (which are what help cover the expenditures for Social Security and Medicare). This 12% is purely personal taxes, of which federal income tax is the biggie.

A magnifying glass on IRS tax form 1040.

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Want to pay less federal income tax? Here are a couple of nifty solutions to consider:

  • Consider making a retirement contribution. Putting money into a traditional IRA or 401(k) through an employer should reduce your current-year tax liability, resulting in less money owed to Uncle Sam. If, however, you're willing to be patient to receive a nice tax break, consider a Roth IRA. With a Roth, there is no upfront tax deduction, but the money in a Roth account can grow tax-free for the remainder of your life, which can come in handy when you begin making withdrawals during retirement.
  • Give to charity! The charitable-giving deduction allows you to reduce your taxable income, resulting in a tax savings equivalent to your peak marginal tax rate. For instance, if your last dollar earned is in the 28% tax bracket, you'll be allowed to deduct $0.28 for each $1 you give to a federally recognized charitable organization.
  • Use your home as a tax shelter. While your home probably isn't going to completely cover you from being taxed, there are a bounty of deductions and/or credits that can help lower your tax bill. Interest paid on your mortgage, points paid on a home loan, and energy-efficient improvements, are all examples of ways you can reduce your tax liability.
  • Don't forget about the Earned Income Tax Credit (EITC)! The EITC is a credit that low- and some middle-income individuals and families can qualify for. Yet, according to the IRS, about a quarter of those who qualify for the EITC never receive it. This credit could mean thousands of extra dollars in your pocket.

4. Utilities and other household operating costs (11%)

Surprise, surprise! The fourth and final highest expense in the average budget is also tied to owning a home. Utilities and household expenses, such as furnishing a home, or paying for services, such as landscaping, babysitting, or pest control, comprise about 11% of annual income. This means that more than a quarter of the average household's income goes toward mortgage payments and home maintenance. And together, the four largest expense categories claim 53% of the average household's income.

Workers installing solar panels on a residential roof.

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Utilities are sort of a necessity if you own a home or rent, so there's not a lot you can do to lower costs. However, there are ideas that can reduce your expenses long-term.

For example, energy-efficient upgrades can cost quite a bit upfront, but the possible tax credits and long-term energy savings may be well worth it. For example, a Nest thermostat, which utilizes Internet of Things technology to learn your temperature settings, can save between $131 and $145 annually for the average household. This means it has a complete payback of less than two years based on its current price. That's a pretty good investment.

Maintaining good or excellent credit can also help with utilities. A utility can't deny you service regardless of how poor your credit report appears, but it can require a large deposit. If you have good or excellent credit, you may not be required to put any money down when commencing utility service, which means more money in your pocket.

The average American household has a lot of ways it can save money!

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