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How Much Should I Budget For Food?

grocery budget

Deciding how much money to budget for food is a personal decision, but there are some guidelines you can follow to help you in making a decision about your own budget. Before getting started, you may find it helpful to gather some historical information, including receipts or credit card statements showing food purchases over the past one to three months.

What to Include in a Food Budget

The first thing to consider is what you want to include in your food budget. This question is less obvious than it first appears to be. Your food purchases are likely to include groceries, restaurant meals, and fast food purchases. However, many people purchase more than just food at the grocery store.

Consider whether you want to include household purchases, such as paper towels and cleaning supplies, in your grocery budget or if you will separate that out into its own category. Separating it out is more precise, but adds the complication of making the budgeting process a bit more time intensive.

In addition to looking at your non-food grocery store items, consider whether to budget for one large food category or create separate budgets for groceries and eating out. If you are trying to cut back on restaurant meals, you may find it useful to budget a specific limited amount to that category to avoid overspending.

Consider Your Personal Food Needs 

The amount you spend on food will vary, depending on your location and household size. For example, two people living in an expensive area cannot directly compare their budget with a family of five living in a low-cost location. Looking at your recent purchases can help you to figure out how much you are spending now, which may give you a more realistic idea of what you will need to budget for the future. If you do not have records of past spending, you may want to spend a month tracking your purchases without changing your habits before deciding on a budget.

Personal habits will also affect your budget. Budgeting is always about setting priorities. If you are a “foodie” and prioritize food over other aspects of your budget, you may want to set a higher budget. On the other hand, if your goal is to pay off your student loans or save for a vacation, you may be willing to cut costs on food.  In addition, if you have the time and inclination to clip coupons and look for sales, you can save money at the grocery store and lower your food costs, compared to someone who is not able or willing to invest that time.

Deciding on a Realistic Budget

Once you have considered your personal needs and past spending habits, you will start to have a clearer idea of what you need to budget for food. Unless you are in an emergency situation, consider cutting 5 to 10 percent from what you spent in the previous month. Think about small changes you can make to reach this new number, such as eating out one less meal each week or sticking to a list at the grocery store.

If you find yourself unable to decide on a number, consider asking friends or family members in similar circumstances what they spend each month. You will find that some people are super-savers with low budgets, while others may have high expenses; try choosing a number in between the two extremes.

Whatever you decide for your budget, be careful to track your spending each month by saving receipts, writing down each budget or by keeping a set amount of cash in an envelope for food purchases. If you find yourself overspending, decide whether to adjust your budget focus more on saving money next month. If you meet or exceed your goal, you can keep your budget the same or try cutting it slightly to have more money available for your other goals.

Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt free. Speak with a certified counselor for a free debt analysis today


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