HomeColumnsWhere Does the Money Go? How We Save, Where We Spend

Where Does the Money Go? How We Save, Where We Spend

As much as we hate to admit it, money is one of the driving forces in our lives. We spend a lot of time working to get it, spending it, dreaming about the day we’ll have a lot of it. But for many of us, that last day never comes. That makes it essential to make tough choices about how we use our money— especially as we age.

The rise and fall of your expenses

Not a big shock: How we spend money changes as we get older. One of the most consistently crucial issues is housing. Our living situation is the largest expenditure for most of us, according to the U.S. Bureau of Labor Statistics, making up a third of our budget. We often spend less on other big expenses, like clothing and transportation, as we get older— especially after retirement. On the flip side, travel expenses tend to increase after retirement, as do healthcare costs.

Goods and Services

“Spending” refers to using your money on goods and services. According to Julie Bang of thebalance.com, almost two-thirds of spending is on services— real estate brokers, entertainment, healthcare, cable and internet providers, etc. Financial services, such as banking, investments and insurance, also fall into this category. The other one-third of our spending is on goods— things like cars, furniture, refrigerators, gas, food and clothing.


Every aspect of our lives was changed by the COVID-19 pandemic, and finances were no different. The website debt.org states that student loan debt, mortgage debt, and personal loan debt rose. Interestingly, however, credit card debt dropped— the first time in eight years that had happened. Again, age plays a big factor in our finances, as debt generally increases throughout life until about age 55, when it starts to drop again.


Most Americans pay little attention to saving for the future. According to The Ascent, a Motley Fool service, about half of Americans have $5,000 or less in savings. A third of Americans have $1,000 or less.

“The single most important thing about saving money is to automate the process,” said Eric Croak of Toledo’s Croak Asset Management. Start a 401(k) plan, set up payroll deductions at work, direct deposit your check into a savings or investment account. Make the process so easy you don’t have to think about it.

There are also a number of apps that help with saving. An app like Acorns lets you invest spare change from purchases. For example, if a purchase costs $23.32, Acorns rounds up to the next dollar, so $24 comes out of your account and 68 cents goes into your Acorns account. Once the account reaches $5, that money will be invested in stocks, bonds and other securities.


It’s important to know how you want your money to work for you. If you think your income levels will rise, it can be a better investment to find a more expensive house, which will appreciate in value. If you’re more interested in travel, you might have to hold off on home improvements. Saving for a child’s education or wedding? Maybe reconsider that new car. Concerns about falling income can lead us to look into finding a smaller house or condo. Your life, and your budget, must be adaptable.


Just like your budget in adulthood, the retirement you plan for will be a reflection of what you want. Will your investments subsidize a life of travel, or is your budget modest? Do you want to move or stay where you are? There is no one-size-fits-all answer for retirement; decide what you want to know where the best path lies.

Money may be one of the driving factors in our lives, but that doesn’t mean we have to let it take the wheel. With planning and understanding, you can take control of your financial destiny.

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