Whether you are extremely frugal, or you're known to indulge in the finer things in life, how you allocate your spending is partially a function of how much cash you have coming in the door.

Simply put, as Visual Capitalist's Jeff Desjardins writes, the more income a household generates, the higher the portion that can be spent on items other than the usual necessities (housing, food, clothing, etc), and the more that can be saved or invested for the future.

Earning and Spending, by Income Group

Today's visuals come to us from Engaging Data, and they use Sankey diagrams to display data from the Bureau of Labor Statistics (BLS) that helps to paint a picture of how different household income groups make and spend their money.

We'll show you three charts below for the following income groups:

The Average American

The Lowest Income Quintile (Bottom 20%)

The Highest Income Quintile (Highest 20%)

Let's start by taking a look at the flows of the average American household: