average household expenditure canada

Blog TLDR

The average Canadian overspends every month with a monthly average household deficit running into CAD940. You can save this amount by reverse-engineering the Consumer Spending Statistics (Canada).

Introduction

On what things does the average Canadian household spend their monthly income? By having an idea of the numbers, you can make your austerity programs to slash debt and pay what you owe on time.

Cost of living in Canada per month (spending behavior)

For context, you first need to understand the average annual household expenditure in Canada. The most recent statistics from Statistics Canada indicate that Canadian households spend CAN$86,070 for a year’s household expenses or CAN$7,172 a month.

average monthly expenses for one person (housing related expenses take up 28% of monthly income!)
Housing related expenses can eat upto 28% of your monthly income

What’s worrying is that Canada’s average household income (not yet excluding taxes) is only CAN$6,232 a month, which means the average Canadian tends to overspend beyond their means. The average monthly household deficit then runs into CAN$940, amounting to CAN$11,280 a year!

The only way households can spend so much despite their income being limited is if they have savings or if they are borrowing someone else’s money.

Average household expenditure Canada – top expenses

From extrapolations derived from Statistics Canada’s data, the largest proportion of Canadian household expenses come from house purchase, mortgage, or rent. These accommodation expenses amount to CAN$1,404 or 19.6% of an average Canadian household’s expenditures.

Housing-related expenses also account for as much as 28.2% of the Canadian average monthly income, which is precariously close to the 30% sustainability threshold that real estate experts suggest.

  • The prices of housing and rent in Canada has been high, so this finding does not come off as a surprise.
  • Income taxes account for the second-highest share of Canadian household expenses, at CAN$1,250 or 17% per month.
  • Expenses related to the acquisition of cars, maintenance and repair of vehicles, and fuel comes in third at CAN$1,059 or 14.8% per month.
  • Food comes in fourth, which costs Canadian households CAN$710 per month, or 9.8% of average monthly expenses.
  • Furniture and appliances, tobacco and alcohol, and “miscellaneous” expenses, together account for the fifth-highest share of expenses in the Canadian household. The sum of expenses from these products can reach $467 per month or 6.5% of expenses.
  • The money Canadian households spend on these things are even higher compared to healthcare. These three items are followed by personal insurance and pensions expenditures, at CAN$428 per month or 6.0% of monthly expenses.
  • In sixth are utility bills and house repairs, which amount to CAN$402 every month on average, which is 5.6% of monthly expenses.
  • . Recreation comes at seventh with CAN$332 being spent on recreation or 4.6%. Healthcare and personal care products closely follow, at CAN$323 or 4.5%.
  • Clothes, including clothes washing amount to CAN$285 per month on average, representing 4.0% of monthly expenses. Education comes at 2.1% at CAN$148 per month.
average household expenditure canada (clothes and washing contribute to 4% of monthly income)

Savings tips based on Consumer Spending Statistics (Canada)

Your income tax and mortgage or rent payments are unavoidable, which are considered as fixed expenses. Instead, adjustments in your budget must revolve around the things where you can do something. Your target is to slash the deficit, which in average Canadian households, amounts to CAN$940 per month.

If your household’s spending profile follows the average trend, then here are the things you can slash:

  • Save CAN$125 and bring your deficit down to CAN$815 by abstaining from alcohol and tobacco. Avoid gambling as well, whether online or offline.
  • Take care of your existing furniture and appliances so that these items would last longer. If you have furniture and appliances that still work, this means you don’t have to spend money buying new or used ones, which can save you another CAN$193 on average, bringing your deficit down to CAN$622.
  • Although some “miscellaneous” expenses can’t be avoided, try to reduce those costs as well.
  • Since transportation eats up a substantial amount of Canadian household expenditures, cuts in that area should be made to save money. If you think owning a car is necessary, consider buying a used car instead of a new one.
  • . Invest in preventive maintenance to extend the life of your car and its efficiency, which would then help keep fuel costs low. However, it’s not just the car itself that is expensive. Fuel, repairs, and maintenance can amount to tens of thousands of dollars in a year.
  • . The best way to save is to forego a car and rely on public transportation instead.

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