One of the biggest expenses most Americans will have is how much money they spend on food and groceries per year.
While I’ve seen different averages per year, ValuePenguin found the average U.S. household food budget to be $6,602, which is a combo of groceries and going out to eat.
But if you did your own food budget breakdown of going out to eat and groceries, you might even see a number higher than the average. Often it is easy to overlook how much we spend on food per week, per month, and per year.
While I love food and trying new restaurants, it’s important to find ways to save money on food. And food is one of the top life expenses you’ll have (besides transportation and housing).
So making changes can help you save money and even improve your health.
How Much Do People Spend on Food Each Month?
According to the U.S, Department of Agriculture, people in the US spend 11% of their income on food, on average. 6% of the total goes to groceries, while the remaining 5% goes to dates, lunches and general dining out.
The USDA website also offers a food plan that provides recommendations on how much you should spend on food per month, depending on your age, who you live with and where you live.
For example, the USDA recommends that a family of two use a recommended spending budget of $85 to $180 per week, and a family of four use $130 to $300 per week.
However, I know in my past that a bulk of my income was going to food and groceries. Much more than I needed to spend (or should of the time) and higher than the recommendation from the USDA.
This was because I did not monitor my spending, so going out to eat from time to time didn’t seem like a big deal.
And when it came to grocery shopping, I just bought what I wanted instead of doing any meal prep in advance, couponing, or looking for sale items.
How Much Should I Budget for Food?
Before we get into the ways to save money on food, it’s important to consider a simple food budget. Although it’s not my favorite process in the world, budgeting is a great way to save money on groceries and going out to eat. Plus, it really ensures you are not overspending on the essentials.
How much you should budget for food depends on how many people you are providing for, where you are living and how strict you need to keep your current budget.
Taking the USDA monthly plan as an example, a family of 4 has a recommended budget of between $130 and $300 per week ($520 to $1200 per month).
The usual recommendation is to spend at least $250 per adult, and $150 per child every month in total. If you have two children, the total budget would be $800 per month to cover both groceries as well as dining out.
If you are a single adult, then you can stick to the recommended $250 per month, or experiment with various budgets to see what works best for you.
Creating your food budget
When you get started with your budget, it helps to have the right tools. This could be a simple Excel spreadsheet where you input all your numbers, or it could be an automated tool such as Tiller or You Need a Budget.
You can easily review your spending over the previous month and compare it to your budget.
If you are using a budgeting app, the tool can take this a step further and calculate everything for you to let you know if you are spending more than what’s in your budget. You’ll also be able to see if you are spending more on groceries than on dining out.
Test various budgeting methods to see what works best. Start with deciding how much you want to spend every month, and then work your way backwards.
And if you don’t use credit cards, make sure to keep your receipts so you can then track the costs over time and compare them to your monthly budget.
How Can I Spend Less Money on Food?
Why do many people spend too much money on food? Well, it can come down to a few things:
- Lack of time to cook or plan grocery shopping
- No interest in cooking or learning to cook
- A lack of financial understanding and impact
Personally, while we all can have busy work and family lives, the lack of time is one of the lamest excuses in the book. If you make it a priority, you can always find time.
However, the second two issues I think are extremely common. For example, roughly 45% of Americans say they hate to cook, while another 45% say they could live without it, according to the Harvard Business Review.
And I’m willing to bet, many people who spend too much on food have no clue where the money is going, how much they are spending, or took the time to find ways to save money on food.
So what can you do if this is you? Well there are a few changes you can make to help you spend less money on food, many of which are quite easy to do.
Couponing is a great way to save money on food without reducing the quality of your food too.
Most grocery stores and supermarkets offer their own couponing apps where you can easily select the coupons you want to use and then they are automatically added on when you checkout.
You won’t need to clip coupons, check magazines or spend hours researching online. Now you just need a smartphone!
2. Take advantage of sales
Make sure to check whenever your grocery store and shop is doing a sale. You can plan your meals around when they offer food on sale, and then take advantage of any food on discounts.
Tell the rest of your family that you want to take advantage of sales so they can let you know when the next one is in town or they happen on any good deals in grocery stores.
3. Meal planning
Having a meal plan is a great way to save money on groceries as you’ll be able to drastically reduce food waste and budget more precisely.
You’ll be able to keep food in the freezer, organize your shopping trips more efficiently and it’ll encourage you to eat healthy food. Now some will plan out weeks worth of meals, but you can start off much simpler than that.
Here are some tips to meal planning you might be interested in.
4. Buy in bulk
When you plan your meals, another good option for your family’s finances to make sure to buy more in bulk. You are more likely to get good discounts and will be able to store food for a year+ or keep the food in the freezer for weeks on end.
5. Try the envelope system
Are you someone who prefers cash? If you only have a specific amount of cash to spend, it makes it very difficult to spend over your budget.
Set up several envelopes with the amount of cash you want to spend for every category and don’t let yourself take money from another envelope if you run out!
6. Use generic brands
Are you a brand name connoisseur or snob? Don’t get caught up in the brand names of food. Many generic brands are just as good as brand labels, and a lot cheaper.
Private label brands are getting better and it’s worth buying them rather than overspending on an expensive pack of Oreos.
7. Avoid impulse purchases or urges
When you go out shopping, make sure to remain focused on the grocery items that you want to buy, rather than what looks appealing.
Just because you want junk food and it may not seem too expensive, you shouldn’t buy it. Stick to the grocery list and you’ll be good to go.
The same can be said for going out to eat. Avoid impulse urges because you don’t feel like cooking or are craving fast food. It’s okay to do that once in awhile, but it’s finding balance and moderation. Your wallet will thank you!
8. Pack lunches
I know, I know this is a cliche and standard piece of money saving advice. But not all financial advice is overly unique or creative.
But all these lunches where you’re eating out quickly add up. You may think it’s easier to eat at a fast-food restaurant or nibble something from the vending machine, but many times the best option is to simply pack your lunch.
This way your food is a lot healthier and you’ll be saving money in the long run. The higher quality food means you’ll also remain full for longer.
9. Share restaurant meals
If you do decide to eat out, a good option is to share your restaurant meals. Instead of buying a huge portion and having to waste the rest, why not share it with a friend or coworker? Pick out something you both like and then eat it together.
10. Keep meat consumption low
Yes, good quality meat is quite an expensive grocery item to buy! Going vegetarian a few times per week can save you a lot of money in the long run.
Meat often accounts for a large part of a person’s grocery bills, so it can make quite a difference to cut it out. If you are going to eat meat, consider buying it bulk and freezing it!
11. Don’t go shopping when hungry
This is a key tip to reducing shopping impulses! Shopping when you are hungry is a terrible way to stick to your budget.
Everything looks appealing and you’ll be tempted to buy more than what is on your shopping list. Make sure to shop after a meal, or even eat a small snack before you go shopping.
12. Eat leftovers
To help reduce waste even further, cook your meals in large portions and then use the leftovers. Make sure to cook something that can last long, and consider even freezing it. You can then use the leftovers for a yummy stew, stir fry or burrito.
13. Shop in season
Buying produce when it’s in the right season is usually cheaper, tastier and healthier. This includes fruits, veggies and anything that grows during a specific time of the year.
If you can, buy the produce in large bags as it’s a lot cheaper than buying piece by piece. And if you have too much, use the rest as leftovers or stick it in the freezer!
14. Use cash back apps
There are quite a few cash back apps that will not only save you money, but also give you money back from shopping partner stores or restaurants.
While the goal is to save money on food, you don’t need to deprive yourself of ever going out to eat again either.
15. Consider different grocery stores
More than likely, you’ll have multiple grocery stores in your area or close to where you live. Often, each store has different costs, sales, and other items to help you save money.
While it might not be worth it to food store hop, it might worth going to ones where you can save a decent amount of money.
When you get too comfortable in your shopping habits, it can end up costing you in the long run. By checking out different stores, you may find yourself saving money on food consistently.How are you saving money on food and groceries? Do you use any of the above tips currently or are there others people should consider? Let me know in the comments below!