grocery shopping Archives - The Free Financial Advisor

For many households, groceries are a big line item in their budgets. Overall, the average amount households spend on food at home came in at $4,942 in 2020, which is a substantial sum. That breaks down to about $411 per month or around $95 per week. However, that doesn’t mean it’s the amount a household should spend on groceries every month. In some cases, less may make sense. In others, it could take more. If you’re wondering how much you should spend on groceries each month, here’s what you need to know.

How Much Should You Spend on Groceries?

It’s critical to understand that there isn’t one figure that’ll work for everyone. Instead, you need to look at the situation in the context of your household. That way, you can find a reasonable approach that lets you handle your needs without breaking the bank.

Averages Aren’t Perfect for Everyone

Above all else, you need to know that average spending levels aren’t right for everyone. For some households, spending $411 a month is completely reasonable. However, dedicating that much to food could break the budget of lower-income households, while it may be far less than a large family might need to spend to maintain proper nutrition.

Using percentage-based averages isn’t necessarily better. For example, in 2020, consumers spent an average of 8.6 percent of their disposable income on food purchases. With that, you may assume that spending 8.6 percent of your budget on groceries could be a reasonable figure from an affordability perspective.

However, every household is different. For example, if you’re working full-time and earning minimum wage, that leads to an annual income of just $15,080, or around $1,256 before taxes and other withholdings. In that case, $411 per month is clearly unreasonable. However, 8.6 percent is only $108 a month, or around $25 per week, which might be far less than you need to spend.

Since that’s the case, it’s important to realize that averages alone aren’t a good indicator of what you should spend. Instead, you may want to try another approach.

Using USDA Food Plans as Guidelines

The US Department of Agriculture (USDA) created eating plans designed to meet health standards while respecting that households have different budgets. That can make them solid reference points when you’re trying to decide how much to spend. Plus, it can help you figure out what to buy to maintain good nutrition.

The four categories available through the USDA food plans are thrifty, low-cost, moderate-cost, and liberal. When it comes to the costs of the thrifty plan and the other three plans, they’re broken down by age and sex, allowing families to estimate how much they’ll need to spend to support each household member’s nutritional needs.

By reviewing those figures, you can see how much it typically costs to create nutritious meals at home. Essentially, they can serve as baselines, allowing you to see how much you might need to spend based on household size.

The main problem is that the plans don’t factor in cost differences between locations, dietary restrictions, or similar issues that may harm the accuracy of the estimates. Since that’s the case, it’s best to consider them guidelines and not hard-and-fast rules.

However, if what the USDA lists is genuinely unaffordable, then it’s okay to make a budget that involves less spending. The trick is to ensure you can dedicate enough to address your nutritional needs reasonably well. Then, you can use other techniques to keep your costs down.

How to Stay on Budget

Apply for Benefits If You’re Eligible

First, if you qualify for any food-related assistance, such as SNAP or WIC, make sure you apply for those benefits. That’ll give you more money to direct toward your food budget, helping you spend less out-of-pocket.

Typically, the application process is reasonably simple. Additionally, using the benefits is straightforward. Just make sure you read the rules regarding qualifying products. That way, you can incorporate the right items into your food plan and grocery list.

Set a Spending Limit

Once you know how much you can get through food-related assistance, it’s time to set a target. Use the USDA guidelines and examine your other financial obligations. You need to determine how much is reasonable for you to potentially spend, effectively setting an upper limit that serves as a maximum. That way, you know that you need to aim below that number every month.

Use Sales, Coupons, and Rebate Apps

Once you set a budget for your groceries, you’ll want to use a range of strategies to remain on target. Use a combination of sale flyers, rebate apps, and coupons (either physical or through websites and shopping apps) to find exceptional deals. If you can couple a sale with a rebate or coupon, your total cost may go down dramatically.

Just make sure you calculate the per-unit cost to determine if it’s actually a deal, as not all discounts are created equal. Further, don’t let a coupon tempt you into getting anything you don’t actually need. It’s only a deal if it reduces what you’ll spend overall.

Once you dig into the sales and other discounts, use that information to create an official shopping list. Outline all of your meals based on the available discounts, recording the ingredients you’ll need to make those specific dishes. Then, when you shop, buy only those items.

If you have trouble with impulse shopping, you may want to try online grocery pickup instead of heading to stores. With that, you can focus on precisely what you need, potentially making it easier to resist impulse purchases.

For stores with loyalty programs, make sure you sign up. In many cases, you can earn points that can reduce your grocery bill directly by saving you a specific amount on your next purchase. In some cases, you can cash out points for free items, lowering your bills further.

Like sales, coupons, and rebates, you don’t want to buy anything you don’t need purely for the points. Instead, it should simply be part of a broader saving strategy.

Create a Meal Routine

Finally, it can be wise to create a routine when it comes to eating plans. If you rotate through the same breakfast, lunch, and dinner meals, you’ll have an easier time predicting your monthly grocery costs. While it may seem like this doesn’t work with a coupon, rebate, and sale strategy, it actually can if you’re brand flexible. You just choose the lowest cost version of the product you need.

Make Adjustments as You Learn

If you’re new to budgeting, it’s crucial to recognize that adjustments are often necessary. If you initially set a grocery spending target and determine it doesn’t reasonably meet your needs, change might be required.

Review your grocery spending patterns to determine if the budget isn’t working or if buying non-necessities is actually the issue. If it’s the former, look at your overall financial plan and see if you can adjust your budget to give you the room you need.

Initially, you might need to review your budget every month to make sure it’s working. That way, you can make changes until you find the proper target, allowing you to develop a spending plan that will work long-term.

How do you decide what to spend on groceries each month? Do you have a system that helps you stay on budget, or do you plan on the fly? Share your thoughts in the comments below.

Tamila McDonald

Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.

Grocery shopping can be hazardous to your health…and wallet if you don’t follow these tips:

Mrs. O.G. is the usually the one who’s in charge of the shopping in our house, so when Joe asked me to write about how to save money, I had no choice but to rope her into this little soiree. So, sweetie pie, how exactly do we save money shopping?

Step 1: Make a list. The biggest mistake “rookie” shopper make is just wandering into a store, grocery or otherwise, without an action plan. In our house, we plan out our menu for the next couple weeks, take inventory of the necessary ingredients, and make a list of the remaining purchases. Nothing is more wasteful than coming home from the store with a fresh bundle of carrots, only to find the same amount in the refrigerator.

Step 2: When you’re buying fresh food, like produce, buy it during its harvest season. For example, it seems like strawberries are quite plentiful right now, while Honey Crisp apples seem to be running out. There’s plenty of fresh fruits and vegetables out there, just make sure you buy what’s in season.

Step 3: Generic usually tastes as good. I say usually because I abhor store-brand almonds, but absolutely adore Blue Emerald brand almonds. Don’t ask me why. But for things like black beans, pasta (which we’ll talk about in a second), tuna, etc., generic works just as good and it’s usually 30% less than brand name. In fact, some name-brand items will “private label” specific items for sale at certain stores – think the Kirkland brand at Costco. While I’m on the topic of Costco, they have a really sweet return policy, so you can always bring your Kirkland brand stuff back. If you’re family is picky like mine, ease into it – buy some generic items and substitute them slowly; see if anyone notices. They probably won’t. You can also check Costco’s new locations here.

Step 4: Be smart with coupons and sales. We used to get the newspaper each day, but realized the only thing we needed and wanted it for was for the Sunday coupons. Take 30 minutes each Sunday afternoon to breeze through the Sunday paper looking for sales and coupons and file them away. We make it a family affair since our kids l.o.v.e. to cut things.

Step 5: Shop healthier, eat healthier be healthier. Eating processed foods that have artificial flavors, colors, and tons of sugar is bad for you. It’s also bad for your pocketbook. Many people think that eating “healthy” costs too much, or is too hard to do, but in you stay away from the interior aisles, you’ll save money and be healthier.

Five quick and simple ways to save money while shopping, according to Mrs. O.G. What ways do you use in your household to save money while grocery shopping?

How Much Should You Spend on Grocery Each Month?