How Much Should You Budget For Groceries?

When creating your budget, it is important that you include accurate numbers. After all, an accurate budget sets you up for financial success. It is easy to know how much you need to include for utilities, loans, and even fuel. However, the one question I see repeatedly is how much should be budgeted for groceries.

As much as I wish this were a simple answer, there is a lot that goes into your budget. The following can be used as a guide when figuring out how much you should budget for groceries.

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How much should you budget for groceries?
It can be tough to figure out how much you really should budget for groceries vs. what you may currently be spending. There is not a right or a wrong number, but you must find the right amount to include on your grocery budget so that you don’t overspend.

Fortunately, there are some different tricks you can try to help you figure out exactly how much you should budget for groceries.

Based upon average American consumption
According to the US Department of Agriculture, American’s spend, on average around 6% of their budget on food. However, the study also shows that they also spend 5% of their disposable income on dining out. That makes your food budget 11% of your overall income!

If you use this method, budget 6% for groceries each month and 5% for dining out. If your take home income is $3,000 a month, you will budget around $180 for groceries and $150 for dining out. Of course, if $180 won’t cover your needs, then you need to scale back on dining out and use any additional money towards your grocery needs.

Actual Spending
A more efficient, and realistic, way to figure out how much to budget for groceries is to figure out what you are currently spending. The way to do this is by completing a spending form.

A spending form will guide you through reviewing all your purchases over several pay periods. The end result will show you an average you are spending on groceries every single week. If you feel that is too much, you can try to reduce your spending, keeping in mind that you and your family will also have to adjust the way you eat.

US Average Plan
Another way to reach a grocery budget amount is to look at the plans created by the USDA. The most recent plans can be found on their website. They provide the weekly cost for a thrifty, low-cost, moderate-cost and liberal plan on a weekly and monthly basis. The amounts are broken down by gender and age. You will need to total the amounts listed for the people in your family.

For example, let’s say you are a family of four. Your kids are a boy, age 12 and a girl, age 8. You decide that you want to try to live on a low-cost plan. According to the report, the total monthly amount for your son will be $236.30 and for your daughter $190.10. Dad’s monthly amount will be $238.30 and mom’s is $206.30. That makes the grand total $871.00, or $217.00.

Special Needs
If you have a family member who cannot eat gluten, or who has other dietary restrictions, these can affect your budget. Make sure you keep these specialty foods in mind when developing your budget as they can cost much more than average foods

REDUCE YOUR GROCERY BUDGET FURTHER
If, after you’ve looked at these ideas and have your budget, you find you need to lower it further, try some of these simple ideas:

Reduce your dining out budget. Eat at home more often and stop meals out. That is a simple way to find money to add to your budget.
Use coupons. While they are not for everyone, coupons are the simplest way to save money on the items you need. Even if the coupons aren’t available for the foods you need to eat, you can find them for household products you use, thereby reducing your spending and increasing money you can spend on the foods you want.
Menu plan. Figure out your meals every single week – before you shop. That way, you have a plan for the week to not only know what you will eat, but the ingredients will be on hand when it is time to cook (reducing those frequent drive-thru meals).
Take the time to create your grocery budget that is feasible. Don’t try to make it so low that it is unrealistic, or your budget will fail month after month. Create the right budget for your own family’s needs and find a way to make it work.