While the cost of college has climbed at an alarming rate over the past 20 years, there remains no purchase more significant -- financially or, perhaps, emotionally -- than a house. While some have rightly questioned whether the American Dream is worth pursuing, the fact remains that we all need a place to rest our heads at night.

According to the Bureau of Labor Statistics' (BLS) 2014 Consumer Expenditure Survey (CES), the average American household spends about $1,030 per month on rent or mortgage, inclusive of property taxes, insurance, and utilities (not including telephone). That's roughly 21% of the average household's income after taxes -- by far the largest expenditure a family makes.

But there are, of course, a dizzying number of variables that influence this figure; perhaps none is a greater factor than a household's income. The CES gives us insight into this facet by providing further granularity based on which decile a household belongs to.

If you'd like to figure out which decile your family belongs in, find out where your total income before taxes falls:


Lower Limit

Upper Limit

Lowest or 1st



























Highest or 10th


The uber-rich

Source: BLS, 2014 CES.

Once you have that figured out, you can see how your own rent or mortgage payment -- again, inclusive of taxes, insurance and utilities -- compares with the average for your particular decile. For further clarification, the blue section represents mortgage (including property taxes) or rent, while the red section represents utilities and insurance.

Source: BLS; author's calculations.

What this all means for you.
Even this data isn't perfect. It's the average of millions of different households -- all with very different family sizes, cultures, values, and life circumstances. While comparing yourself with others who share the same income as you is helpful on a relative basis, I don't think any hard and fast conclusions about how you are spending your money can be drawn from it alone.

Instead, I think the takeaway comes from the big picture: What you are spending on your home is significant. If you want more financial freedom to pursue the passions that interest you, addressing your housing situation should be front and center.

Lots of people think that where they live is the end all and be all of their future life's happiness -- or at least that's the trap we pull ourselves into when it comes time to buy a house or find a place to rent. But we humans are actually supremely adaptable creatures, and we oftentimes discount this adaptability.

I have written and researched about the intersection of finance, life design, and happiness for over five years now. There are a few things I've repeatedly noticed that do seem to affect your happiness when it comes to housing:

  • Having a long commute kills your spirit.
  • Walkability is important.
  • Feeling safe is crucial.
  • Being close to friends and family makes a huge difference.

Instead of focusing on "buying as much house as you can afford," I suggest addressing these four priorities first, and then buy only as much house as you need. No matter what decile you fall into, you'll be setting yourself up for a healthy future -- both emotionally and financially.