It’s easy to spend too much money on food.
After all, you have to eat.
And you have so many options. You can cook at home, but if you don’t feel like it, you can grab takeout on your way home, get something delivered, or go out to eat.
You can’t avoid feeding your family and food costs what it costs, right?
That’s the attitude we used to have. If you feel that way too, you’re probably overspending on food.
Before we realized we needed to start a budget and stick to it, Jerry and I would just spend whatever we wanted on food. We figured we maybe spent $200 each on food every month.
Then we started tracking our spending. What we thought we spent on food and what we actually spent were not even close.
We were spending over 20 percent of our take home pay on groceries and restaurant meals. We didn’t really know how much to budget for food, but we knew that what we were spending was just way too much.
We went on a mission to come up with a sensible budget for food we could live with. If you’re in a similar situation or if you’re creating your first budget, you might ask yourself: How much should I budget for food? Read on to learn how to create a food budget you can stick to.
How to Create Your Monthly Food Budget
To help people set their food budgets, the USDA puts out official food plans every month. They split these food plans into four spending categories: thrifty, low-cost, moderate-cost, and liberal.
The USDA plans consider average food costs for a healthy diet of meals and snacks made at home. The plans break out the costs further by gender and age.
If you really want to slash your food spending or you’re having trouble making ends meet, use the thrifty plan as your benchmark. If you have more money to spend, you can try the low-cost or moderate plan.
Monthly Food Budget for One Person
A thrifty millennial female like me gets $236.60 per month to spend as of July 2022. That works out to about $7.89 a day.
On the high-end liberal plan, I’d get $393.80 a month. To me, that seems like too much, especially after all the efforts we made to lower our food spending.
I could probably make the thrifty plan work, but realistically I would need a little more flexibility with my grocery budget.
The low-cost plan allows for $251.80 a month. That’s where I would start.
Remember that this doesn’t include meals out or coffees and such. If you’re a college student or a single working professional, you might eat out two or three times a week. That will likely push your food spending into the $350 – $400 a month range.
Monthly Food Budget for Families
Let’s say two adults pushing 40 and two pre-teen children make up your family. On the low-cost plan, the monthly grocery bill would come to $1,039.80. Here’s how it breaks down:
- $251.80 for the female adult
- $290.50 for the male adult
- $247.60 for the 12-year-old girl
- $249.90 for the 10-year-old boy
Keep in mind that these figures represent the average. You might have to adjust them to meet the needs of your family. While not perfect, these numbers will show you if your spending is in the ballpark or way out of line.
Again, that’s just for meals and snacks prepared at home. If you have date nights or take your family out to dinner, that will bump up your food costs. Take a look at your budget to see how much you typically spend on food outside the home then add that in.
How to Budget for Food Based on Your Income
If the USDA food plan numbers don’t work for you, you can find the right amount to budget for food based on your income and your overall budget.
Start by adding up your fixed expenses. Then determine how much you have left for variable expenses and discretionary spending. Food spending fluctuates every month, but obviously, it shouldn’t exceed or take up all of your remaining budget for variable expenses.
So what is the maximum percentage of net spendable income that should be set aside for food? According to the USDA, Americans spent 9.5 percent of their net pay on food in 2019 between eating at home (4.9 percent) and eating away from home (4.6 percent).
If you’re spending ten percent of your take-home pay on food, you’re right around average. If ten percent feels like too much or if you spend much more than that, look for ways to trim your food spending.
Cooking at Home vs Eating Out
You don’t have to be a personal finance nerd to know that preparing your own meals at home is cheaper than eating in a restaurant. But it actually costs five times as much to have a restaurant meal delivered to your house as it does to cook a meal yourself from scratch. Sometimes more.
For example, you can make homemade chicken parmesan for $2.44 per serving. If you fire up DoorDash and have your chicken parm delivered from a chain place, you pay over $20 for it. That’s quite a difference.
Besides the money you save by eating at home, there are also health benefits. You know exactly what’s in your food and how it’s prepared. Substitute healthier ingredients and exercise portion control at your discretion. You don’t have to worry about food allergies, dietary restrictions, or unsafe food handling when you cook at home.
You don’t have to avoid dining out altogether. There are ways to save money at restaurants.
Coupons aren’t just for groceries. You can find coupons for local eateries in newspaper inserts, in the mail, and via restaurant websites or apps.
Some restaurants also have promos you can take advantage of, like nights where kids eat free. Some have loyalty programs you can join for discounts or free food.
As long as you cut down the number of meals you have outside your home, you’ll save a lot of money.
Spending Less at the Supermarket
Since food is a necessity and usually takes up a significant portion of your budget, cutting back on food spending helps you free up money to put toward your financial goals.
It is possible to trim your grocery expenses without sacrificing taste, quality, or nutrition. Here are a few tips for saving on groceries:
Only Buy What’s on Sale
This is my number one tip for saving at the supermarket. I’ve mentioned it many times on this blog, but it’s worth repeating: don’t buy anything at the grocery store that isn’t on sale. If you do this and nothing else, you’ll instantly cut your grocery spending.
If you normally shop based on what you’re in the mood for or what your favorite recipes say you need, you’re probably paying full price for most of your groceries. The savings from buying sale items only could be substantial. Plan your meals around the sales flyer, not your cookbook.
Buying discounted items only is not always possible, unfortunately. Plans change, stuff goes bad, and things run out. When they do, it doesn’t always line up with an amazing deal.
But still aim to only buy things on sale as much as you can. When you can’t, you can fall back on this list: 68 Cheap Foods to Buy When Broke
Finding coupons is easy and they work, so why not use them? You can get free coupons in the mail, online, via email, in-store, in newspapers, and via grocery store apps.
A single coupon might not offer massive discounts, but the savings add up. Make sure you’re not buying things you don’t need just because you have a coupon, though.
Don’t Shop When You’re Hungry
If my husband goes to the supermarket when he hasn’t eaten, he’s coming back with:
- A rotisserie chicken
- Something sweet from the bakery
- A weird-looking bottle of hot sauce with the word death or diablo on the label
- A couple of bags of beef jerky, one of which he opened in the car during the ride home
- Possibly a kitchen gadget or something totally random like a t-shirt or a lawn chair
He might leave thinking he’s only buying a few staples. But he just can’t stick to the list when he needs to eat.
Don’t shop for groceries on an empty stomach. Trust me, you’ll save money.
Get Cash Back on Food Purchases
With Ibotta, you look for cash back offers from your favorite local stores then add them to your list. When you’re done shopping, you scan your receipt via the app. You’ll get cash back, usually within 24 hours.
Dosh works a bit differently. You register your credit or debit cards with the app. From there, any time you use your card at a participating store or restaurant, you get cash back credited to your account automatically.
Both apps let you cash out to PayPal or your bank account. Dosh also lets you donate your earnings to the charity of your choice.
How Much Will You Spend on Food?
You might have to go through some trial and error to arrive at an amount that allows you to eat healthy meals you enjoy without overspending.
Yes, you have to eat. But it shouldn’t be an excuse to justify overspending or blowing up your budget. If you cut down on restaurant visits and shop for groceries a little more strategically, you can knock quite a bit off your food expenses each month.
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