How Much Should Your Monthly Grocery Budget Be?

Your grocery bill can add up fast. From dinner entrées to snack items, the amount you spend makes a difference in your budget. Luckily, there are some guidelines to ensure you’re not overspending. The USDA publishes a monthly food plan suggesting how much your groceries should be. The average cost of food per month for one person ranges from $165 to $345, depending on your age and gender. These national averages also vary based on where you live and the quality of your food purchases. Different geographic locations and types of stores play a role in the price of your food.

Getting your food budget on point takes practice. With the right spending habits, you’ll have enough for your living expenses and exciting financial goals like paying off loans or buying a house.

Monthly Grocery Budget

Based on your family size, here’s an outline of how much you should plan to spend on groceries each month. These numbers are a national average. Adjust the amount depending on your location and the store you shop at. For instance, shopping in New York City or Los Angeles is more expensive than in other parts of the country. Organic grocery stores like Whole Foods are pricier than places like Walmart or Aldi.

As you consider these numbers, factor in any dietary restrictions. For instance, if you eat gluten-free or nut-free, you may have to pay more for certain products—increasing your overall monthly grocery budget.

1 person $251
2 people $553
3 people $722
4 people $892
5 people $1,060
6 people $1,230

Finding a reasonable monthly grocery budget ensures you and your family have what you need, while not overspending. Look back at previous months using a budgeting app or credit card statements to see what you’ve spent at the grocery store. Decide if you want to maintain your current budget or cut back.

Purchasing Groceries vs. Dining Out

When you think about the total amount you spend on food, don’t forget what you spend at restaurants. According to the U.S. Department of Agriculture, Americans spend on average, 11% of their take-home income on food. It doesn’t all goes toward groceries, though. Approximately 6% is spent on groceries, while 5% is spent on dining out—including dates, lunches with coworkers, and Sunday brunch.

With this framework in mind, you can calculate your total food budget based on your take-home income. For example, Rita makes $3,500 per month after taxes. To budget 6% for groceries, she’d spend $210. For dining out at 5%, she should set aside $175. In total, she’ll need $385 for food each month. If she finds herself not having enough for meals with this amount, it’s likely she’s spending too much on food. She can either reduce her grocery bills or scale back on eating out.

Tips for Reducing Your Budget

There are several ways to cut back on what you spend without sacrificing the quality and taste of your food. Trimming your food budget can help you stow away more for your goals, such as building an emergency fund or saving for a dream vacation.

Use Coupons

Grocery stores and food companies offer coupons with a discount on a product that are often distributed via mail, newspapers and magazines. You can also find coupons online or through your email. If you buy your groceries online, like through Amazon Prime Pantry, there may be discount codes to input at checkout. While a single coupon might not give you a large discount, you can save a lot with multiple coupons. 

Before using coupons, though, make sure you actually need the item. If you don’t need maple syrup or cashews, don’t buy them just because you have a coupon.

Plan a Weekly Menu Ahead of Time

By deciding on meals ahead of time, you can determine the food items and quantities you need. Before heading to the grocery store, your list will be specific. You can buy the items you need—knowing you’ll have delicious meals for breakfast, lunch and dinner. Try recipes that use some of the same ingredients so there’s less to purchase. You can also make larger meals so you have leftovers—which limits the number of meals and ingredients to buy.

Here’s an example of menu items for your week:

Breakfasts: Greek yogurt with fresh fruit, oatmeal with raisins and nuts, toast with peanut butter

Lunches: Salad greens with chicken and vegetables, wrap with lettuce and lunch meat, soup and garlic bread

Dinners: Ground turkey tacos, grilled chicken breast with vegetables and rice, lasagna and salad

Bring Lunches to Work 

A $13 lunch out might not seem like a lot, but if you spend that much a few times a week, it can blow your food budget fast. Make your monthly food budget go farther by making lunches and bringing them to work. Inexpensive but healthy options include salads, sandwiches and dinner leftovers. 

Buy Store Brands 

You can buy the same product, such as pasta or oatmeal, for a variety of prices depending on the brand. In general, store brands, like Safeway, are cheaper than name brands. A box of store-brand cereal might save you $1 over a name brand cereal. While the savings on a single item may not be much, when you multiply it across several products, there will be a difference on your bill. 

Shop at a More Affordable Store

The differences in prices among grocery stores can be considerable. Check out the different stores in your area to find the best prices. Some stores might even offer bulk items—great for products you consume in large quantities. Choosing cheaper staple items like milk and yogurt can also make a huge difference over time. 

When you have a food budget that works for you, you’ll feel more confident and in control of our finances. With a set amount for groceries (and dining out), you’ll have a solid vision for your month. You’ll feel more in control of your finances, and be on your way to bigger goals like a new vehicle or a downpayment on a house. 

Sources: USA Today | USDA

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