Families spent an average of £531.30 a week last year, with the lion's share of the budget going on transport, driven by car buying and cheaper fuel, according to the latest Family Spending report.
The overall figure is an increase of £7.40 on 2013 but is £24 higher than the total in 2012 when spending averaged £507.40 a week - the lowest since current records began, according to the Office for National Statistics.
The report reveals that average weekly spending on transport increased by 6% in 2014 to £74.80, accounting for 14% of household budgets.
The highest percentage of transport costs went on travel fares, at £16.10, followed by petrol (£14.90) and buying second-hand cars or vans (£14.60).
Housing, excluding mortgage payments, fuel and power was the second most expensive category at £72.70 a week, followed by spending on recreation and culture, which increased to £68.80 per week.
Families spent an average of £58.80 on food and non-alcoholic drinks each week, buying £5.40 worth of bread, rice and cereals and spending £4.80 on drinks other than alcohol, £3.50 on fresh fruit, £4.20 on vegetables, £3.70 on buns, cakes, and biscuits and £1.90 on chocolate.
Households in London and the South East spent the most, while those in the North East and Wales spent the least, and spending in rural areas was on average higher than in urban centres.
The lowest-earning 10% of households spent an average of £188.50 per week, whereas the highest-earning 10% typically spent £1,143.40.
The detailed report reveals that families spent an average of £12.30 on alcohol, tobacco and narcotics, but just £9.80 on education and £7.10 on health.
Overall, households increased their spending in most categories between 2013 and last year in a sign of increasing consumer confidence.
One of the report's authors, Joanna Bulman, noted that spending in two categories - housing, fuel and power and alcohol and tobacco - dropped, the former in part because warmer weather and better home insulation reduced energy consumption.
The decrease in the alcohol and tobacco category was in large part due to a drop in the buying of cigarettes, she said.
The report also shows that spending on food and non-alcoholic drinks has been level since 2011, partly because of the increase of discount supermarket chains, increasing consumer choice and competition in the market.
Spending on clothes and shoes fluctuated only slightly between 2011 and 2014, while spending on restaurants and hotels has followed a broadly downward trend between the year ending March 2002 and 2014.
Ms Bulman said: "The trends in different types of spending between 2013 and 2014 provide evidence that consumer confidence is increasing as the economic recovery continues.
"An increase in spending was observed in all but two categories of spending, although not all increases were statistically significant."