MONEY COMMENT
Britain's Biggest Expense

By Stuart Watson (TMFTiger)
January 23, 2003

Apparently the average household in the UK earned £550 a week before tax last year. And each week they spent, on average, about £400. Contrary to what you might expect, the biggest expenditure goes not housing, but cars.

According to the Office of National Statistics (pdf file), here's what the average Brit spends over the course of a week:

Transport                       58
Recreation & culture            54
Food and non-alcoholic drink    42
Housing, fuel & power           36
Restaurants & hotels            34
Household goods & services      30
Clothing & footwear             23
Alcoholic drink & tobacco       11
Communication                   10
Other stuff                    100
                             -----
Total                          398

Our cars make up the lion's share of transport costs, despite recent price reductions, with purchase costs accounting for £25 a week and petrol and servicing for another £20. Three-quarters of households own a car and on average, we spend just £4 a week on public transport. So if you're looking for an easy way to save a bit of money, your pride and joy may be the best place to start. (See our car buying guide for some handy hints and tips).

By contrast, we spend just £36 a week on housing, of which around £25 relates to mortgage payments. With the battle for Safeway (LSE: SFW) in full swing, the Competition Commission may be interested to know that of the £42 a week we spend on food and drink, four-fifths of it already goes to large supermarket chains.

Over 7,000 households took part in this survey. Whilst recording exactly what you spend in the course of a week may seem a little excessive, it's an extremely useful process, especially if you find that you always seem to run out of money before your next pay cheque comes in. For a real-life example, take a look at this series of articles called 'Living by the book': part 1 | part 2 | part 3 | part 4.

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