I wrote an article about determining a grocery budget about three years ago and I thought it was high time I updated it!
There is something about the word budget that makes most people grumpy. It isn’t a fun subject to discuss but for most of us (if not all!) it is something so necessary to have.
Why Do I Need a Budget?
I think it is important to be in charge of your money rather then having your money be in charge of you! I think some of us just assume that grocery spending is a fixed expense, meaning it is what it is and there isn’t much we can do about it. If you are a person that is trying to pay down debt or a person that is struggling a bit with expenses this is a great time to revisit or create a budget.
If you are a person that isn’t struggling- you might think that reviewing the grocery expenses is not necessary for your family. I disagree! This can be a big chunk of your monthly expenses and I think it is important to at least recognize how much you are spending each month. Sometimes when we are confronted with the actual numbers, you start to realize that some changes are in order.
Take this example, let’s say you are currently spending $900 per month for groceries. Maybe you eat out occasionally- including that Siren Call of Starbucks- and that works out to $200 per month. Guess what? You are spending $1,100 total on food per month which works out to $13,200 per year!
Now $1,100 seems crazy to me and $13,200 makes me feel a little nauseous. So you might be saying to yourself- well who the heck spends that much each month? I don’t even come close to that.
Here is where the bad news comes in… I think most of us vastly underestimate how much we actually spend.
I know I tend to zip into Safeway or Target to grab this or that to the tune of $10 or $30. I go to the grocery store once a week and spend about $40 on milk and produce… plus there is that trip every few weeks to Costco… Oh and I was tired after shopping at Costco so I grabbed a pizza on the way home….
In your mind you might have a set figure- well I only spend $100 a week or so at the store but is that really and truly the case? You might be surprised at how quickly those little $10 and $30 trips here or there can add up.
So even if you don’t think you need a grocery budget I would encourage you to just try adding up your expenses for one month and see. If you are exactly where you think you are and you are happy with what you spend, well you deserve a pat on the back and a cookie for sure. But most of us might actually be a little surprised at what we find.
Setting Up A Budget
So now what? Well the first step is to take a four week period and keep track of every penny you spend on snacks, groceries, take out etc… The easiest way to do this is to just tuck a special envelope in your wallet and tuck every last receipt for the month into it. Next sharpen that pencil and just tally the amounts up.
What did you REALLY spend. Now is the time to be very honest with yourself. As my yoga teacher says, this is your workout. The only person you can cheat here is yourself so let’s give it our all because we are worth it right? If you bought a $1 ice cream cone for the kiddos that receipt better be in the envelope. If you grabbed Sushi for lunch at Whole Foods for $8- well that receipt better be in there. Your hubs stopped for beer and chips to take to poker night- well that receipt better be in there. Don’t cheat yourself.
Once you have that number you can compare that with your monthly income. A rule of thumb is spending 5-20% of your income on food. So let’s just say you bring home $3000 per month. A very rough estimate of what your budget would be is $150-600 per month.
This is going to vary considerably from person to person- the number of people in your family, where you live, special dietary needs and other factors will feed into this equation.
So now you have your number and you can take that and just see- does it seem reasonable or make you feel queasy? Does that number fit into your monthly expenses?
This is where looking at the overall budget comes into play.
Hopefully you have created a family budget but if not, this is not hard to do.
You simply add up what you bring home each month- if you are commission based or have an irregular income you might look at what you made last year and divide that by 12 to get a monthly average.
Next take a look at fixed expenses- these are things that won’t change- your mortgage/rent, school tuition, car payments, loan repayment, child support etc…
Now add in all those variable expenses like gas, eating out, gifts etc… Hopefully you are still in the green and we can start looking at the grocery budget.
This is where things can get a little tricky because I just told you above that you should be able to spend 5-20% off your income on food. Well what if we added everything up and we don’t have that much left over? Or what if we want to get out of debt and pay more towards credit cards and loans and such? Or we are saving for xyz expense?
Well now its up to you to determine what you want to do. When we were in serious debt payoff mode, our budget for 2 adults and a baby was $30. Let me tell you that was hard!! It took me tons of time each week to plan our menu and plan my shopping lists. I usually went to 3 stores a week and I was cutting coupons like crazy.
BUT I did make it for over a year on that budget and we were able to pay off 100% off our consumer debt (not including the house.) So in the end it was worth it.
These days I don’t want to invest as much time so our budget is closer to $100 per week. Yes I could absolutely cut that back but we eat really well and I invest the least amount of time possible into shopping.
One very important note I want to make is that you don’t need to sacrifice your health for your budget. I get a little crabby when I hear people say if you have a tight budget you can only eat junk food.
I don’t agree at all. In fact a 1lb bag of baby carrots is the same price (or less) then a 2L of soda in my area. A bag of Doritos might be $2.99 in my area- well I can get a box of whole grain pasta and a high quality pasta sauce for the same price (or cheaper with coupons.)
My grocery store charges $.89 for one candy bar. I can get a pint of blackberries for $.99 right now. A carton of ice cream is about $3- for the same price I can get 2 lbs of strawberries.
So really it isn’t about changing your diet to nothing but junk food to save some money. I think it is about really being aware of what you buy and focusing on the best quality you can get and really simplifying what you make.
And the final payoff.
I like to try and have a glass is half full approach to anything I do. If I look at budgeting (or anything really) as deprivation and a hassle and poor me… well that makes this entire process a real bummer. You might consider turning things around and instead finding something to get excited about so that you are budgeting not to be mean to yourself but rather to achieve some sort of goal.
When we were paying off debt I had a sheet of paper taped front and center on the fridge with all of our bills. If I spent $30 that week on groceries and freed up $70 to send to Visa- well I immediately sent a check and immediately adjusted the Visa balance on my paper. To constantly see progress was so exciting and motivating to me.
To give another example, I am on a diet these days. I need to lose a few pounds of winter chub. It makes me super grumpy to diet- I hate having to watch every single calorie. I hate having to really think about everything I eat. I hate having to say no thank you to that yummy artichoke dip passed around at parties. So instead of being snarly and crabby I keep trying to focus on what I am losing the weight for and using that to stay motivated. We live in California and my kiddos love to spend time outdoors in the water. So this year I am determined to be confident in a bathing suit. I want to feel great at the water parks and not hiding in the shade with my cover up on as my husband has a great time splashing around with my girls. So while I am not overweight there is still room for improvement (both to my overall health, energy levels, the example I set for my kiddos etc..) When the yummy artichoke passes me by I try to focus on thinking about how much fun we will have at the beach this year instead of focusing on what I am missing out on.
This can relate back to the budget too. Maybe you aren’t struggling financially but what could you do with an extra $5,000 a year? That could be a nice vacation, a home improvement project, the start of a college fund for the littles… and so much more.
So to summarize- here are the steps I suggest in determining your grocery budget:
1. Add up what you spend on an average month so you have a starting point.
2. Take a look at your overall family budget to see how much you actually want to allocate to food each month.
3. Set up goals that you can achieve to stay motivated- i.e. if I can cut 10% off my grocery bill next month I am going to start on a plan to finally pay off my Visa bill.
4. Focus on the goal rather then the process to get there. Hopefully you can get a fire going in your belly to stay motivated.
5. Once you have set a realistic and reasonable budget- try switching to the cash method. Pull out xyz amount in cash each week or month and try to just use that to pay for dining out or groceries. Once the money is gone, open up that pantry and try to get creative with what you have. The most important thing is to just do your very best to stay out of the store.
Here are a few more resources that might be of interest:
- USDA Cost of Food by month (this is a general guide as to what the average family spends on groceries.)
- Free Printable Budget Worksheet
- Free Online Budgeting Program (with a mobile app) from Manilla
- How to Create a Weekly Menu Plan
- How to Save Money Without Using Coupons
I hope this information is helpful but please note I am not a financial planner or adviser. I am just a Mom sharing tips on what worked for our family.
Rachel says
Ooooh, I love this post! You made so many great points. I absolutely need to get real with what we are spending on food – I like the idea of saving all receipts for a month to add that up. I also like the examples you made showing how people can afford healthy food vs. junk which is so true. There is no reason to overspend on food! I’d much rather spend the money on a vacation or an experience. Thanks for the reminder!
Tatyana says
I love this article, thank you!
Sylvia says
Thank you! What a timely post. I actually am working on refining our budget now after seeing how much we spent on groceries and dining out/takeout last month. I want to ask you though – does your grocery budget cover both food and household supplies or ONLY food?
Charlene says
Sylvia,
That covers everything but really I got way off track in Nov and Dec. Jan has been a little over that amount too just because I have been terrible about planning. In general though $100 seems to be workable for me for pretty much everything. I have used coupons for so long though we have a few of everything- a few body wash, a few laundry soap, a few dish soap etc… so that makes it a lot easier to stick to a budget.
Shelley says
You are exactly right about all those little trips adding up. I was shocked when we went through and calculated how much we were actually spending each month on groceries. We finally in December put ourselves on a budget. I get out cash every Friday and we split it between groceries/household items, our entertainment fund and my husband’s allowance for work lunches. So far it’s working out well and it’s sort of like a challenge to spend as little as I can each week. It’s also forcing me to be better about planning out our meals so I don’t waste any of the money on things we don’t need.
Kara says
Thanks for your honesty and your encouragement!
Sylvia says
Thanks for clearing that up, Charlene!
cathy says
Thanks for a great article. It can be hard to get out of debt. I’d like to be debt free and pay off the mortgage. We do have a low fixed rate on current mortgage. They say it can be better to save than pay off a low rate loan. But there is peace of mind. What do you think?
Sarah O. says
I’ve been couponing seriously for about two years now, but haven’t been great about tracking what I spend on groceries. I’ve just started and I was shocked that I spent as much as I do! We are very fortunate that we don’t have to really watch what we spend, but I can’t stand thinking that we are wasting money. I mean that money could go into savings, college funds, vacation, etc. I wish everyone would invest a little time into it. It also makes me feel so much better to read that you go over budget occasionally and don’t like to spend so much time shopping. I sometimes feel guilty, but have to weigh the benefits of spending time with my daughters/husband or exercising against saving a few dollars. I love reading your blog because I can tell you like buying healthy food, higher quality things for your family, etc. Keep up the great work!
Terry says
Thanks so much Charlene for such a great post .I follow your blog daily,yet I can’t save or reduce our spending on grocery : (
P.S.
**Would you kindly email me a week worth of planing for grocery…2 kids 4 and 6 and 2 adults? I would greatly appreciate it, we do need big help with our spending *** thanks in advance
Terry
Rikit Pandey says
I loved the post , I got an Idea how to create a budget for grocery in this quarantine
Charlene says
Urg prices are so high right now Rikit. At least in my area prices are really going up. Good luck to you 🙂
Rikit Pandey says
I loved the post , as the prices are very high of grocery in my area due to lockdown. I will set a very -well organised budget for grocery