As inflation soars, here are Americans' most common household bills

As Americans grapple with the highest inflation in a generation, a look at consumer spending patterns reveals where families are seeing the sharpest price increases

The typical household spends $2,000 every month paying bills, according to data from bill-pay service doxo shared first with CBS MoneyWatch. Roughly a third of the typical household budget is spent on bills, the company found.

What varies dramatically is how bills are paid — certain types of expenses are frequently paid with cash, while others more commonly go on a credit card. Customers are strategic about when and how they make payments, the research showed.

Who, what, how

According to Jim Kreyenhagen, head of marketing and consumer services at doxo, consumers often think that their preferred way of paying bills, whether by bank transfer, credit card or mailing a check, is the default mode of payment. But people pay their bills in a number of ways.

"The way consumers pay their rent or mortgage bill is very different from the way they pay their utility bill," he said.

Consumers usually stay away from using cash to pay bills, except with rent —  20% of people pay their rent in cash, doxo found. Meanwhile, consumers are twice as likely to use a credit card to pay a gas bill as they are for car insurance. 

While mobile pay options are becoming much more popular for shopping, they're very rare for bill payment, with consumers reporting using mobile pay options for bills less than 2% of the time.

Delayed payments

While the typical household in doxo's dataset pays 10 recurring bills, many people also delay at least one, doxo found. Every month, about 15% of bill payers delay a payment.

That number rose at the start of the coronavirus pandemic: In 2020, about 4 in 10 households reported delaying a bill payment. Of those who did, more than two-thirds reported putting off a utility bill.

Decisions about which payments to delay likely reflect consumers' calculations of how long utility companies take to respond to missed payments, Kreyenhagen said.

"If I am making a decision about which bill I'm going to delay, we all know that utility companies are fairly forgiving," he said. "If I skip a bill, my power doesn't get turned off right away … But we also know, if you skip a payment on your rent or your mortgage, that's costly." 

More inflation is coming

Economists expect inflation to remain well above the Federal Reserve's 2% target this year. But higher prices won't be reflected across all bills, Kreyenhagen said. 

For instance, higher mortgage rates won't affect customers who are already paying mortgage and home-insurance costs. Rates for car insurance, which also have jumped, are likely to be reflected later this year and next year as existing customers renew their policies. On the other hand, utility costs — which have already risen for many — will likely increase even more, Kreyenhagen said.

"We think utilities are going to go up — we're already seeing some indication of that," he said. "That's driven by fuel prices."