How Much Should You Budget for Groceries?
How Much Should You Budget for Groceries
When drumming up a spending plan for you and your family, you might be asking yourself: How much should I spend on groceries?
Here’s the thing: There’s no right or wrong number. However, setting a few basic parameters and allocating a proper amount will help you live within your means. Plus, it’ll help you make steady progress on your money goals.
Let’s look at how you can gauge how much you should spend on food each month, and how to manage your money wisely:
Look at All Your Expenses
First things first: How much do people typically spend on food each year? Per the Bureau of Labor Statistics, in 2018 U.S. households spent an average of $7,923 on food costs, which breaks down to $660.25 a month or $152.37 a week.
If you’re looking at food eaten at home versus food consumed while out, on average Americans spend roughly half — 56% to be exact — of their food budget on groceries, and the remaining half (54%) eating out.
Of course, your grocery budget depends on the size of your family, how much food you consume, your lifestyle, and the quality of the food. If you’re on a special diet, you might be shelling out more money for groceries. For some, your food budget might take up 10% of your take-home pay. It might be a little less or a little more, depending on your needs.
You’ll also want to see how much your other expenses take up of your take-home pay. For instance, how much are you spending on housing, transportation, bills, and insurance? And where does food-spending fit into your budget?
Create Separate Budgets for Groceries and Eating Out
Want in on a little secret? It’s helpful to treat groceries and eating out as separate budgets. That’s because you have different means of control and motives for spending on these two separate categories. And if you’re trying to cut back on your food costs — which we’ll get to in just a bit — it’s easier to start with one area.
For instance, when it comes to eating at home, you typically can plan out your meals in advance and prepare a grocery list. This way you’ll have more control over how much you spend. In fact, you tend to eat in when your work or social life is less hectic.
On the flip side, when you’re eating out, you might spend more than you anticipated. Plus, you might pick up some casual eats or fast food when you’re too busy to cook at home.
Not sure how much you should budget for food? A good place to start is to see how much you’re already spending. Look at past transactions on your bank statements or money management app to see how much you typically spend.
Surprised at how much you’re actually spending on food? No need to freak out. You’ll just need to make adjustments. Here are a few ways you can save on your food costs:
Drum Up Ways to Save
There are so many ways to lower your food costs. The same way it’s beneficial to divvy up your budget for groceries and eating out, it’s helpful to focus on saving on food eaten at home, and on eating out.
If you’d like to start with your grocery bill, it might be easiest to shop at a supermarket chain that offers lower prices overall. That way you won’t be tempted to spend more on bougie, higher-cost items. Another option is to scour the weekly mailers for deals. Many larger grocery chains have an app you can download or newsletter you can sign up for that might offer exclusive deals to its subscribers. It’s that easy!
Before you step foot inside a market, check your fridge and pantry to see what you might already have. You might realize you need fewer ingredients than you expected, which means saving more! You can also cook in batches to save some dough.
If you’re trying to save on food, eating in more will probably help your pocketbook the most. But when eating out, you can visit a happy hour instead of dinner. You can also hunt around for early bird specials, or maybe get a deal through a daily discount site on a meal while out.
And going on a special diet doesn’t always mean you’ll be spending more. For instance, earlier this year I went on a GAPS diet that consisted of raw milk, organic vegetables, and free-range meats. While the grocery bill was a little higher, I ended up saving about $150 a month on food overall. That’s because I purchased fewer ingredients, rarely ate out, and cooked in batches.
Know What You Value
As you can see, there’s no magical percentage or number you need to hit for your food budget. It really boils down to what you can reasonably afford and what is important to you. You’ll want to pay close attention to your spending habits around groceries, and make adjustments if you are having trouble sticking to your overall budget.
If you like eating out and spending more on high-quality groceries, then you might want to allocate a little more of your budget towards your groceries. If you’re going to do that, you’ll need to make adjustments in other areas of your life.
Remember: How much you plan on spending on food can vary from household to household. Your budget is yours to shape so that it works for your needs, preferences, and lifestyle.