How to Create a Food Budget

July 13, 2022 by First Federal Bank

foodWhile food expenses are a necessary component of any monthly budget, there are practical ways to reduce food costs. You can create a monthly food budget, and take other steps to stick to personal savings goals in this area:

Calculate your typical monthly food expenses

According to Kitchn contributor Michaela Cisney, you should track your food expenses for one month. You’ll want to keep each receipt from the grocery store since you’ll need to itemize food expenses by category. Cisney recommends using a digital spreadsheet. Categories can include baked goods, drinks, fresh produce, frozen meals, and meats. It’s also a good idea to include how much you spend eating out each month.

Compare your food spending with USDA food plan averages

Next, compare your monthly food expenses to those in your area, Lifehacker contributor Melanie Pinola advises. A great resource is the USDA’s food plans listed online, where each plan falls into one of four categories: thrifty, low-cost, moderate-cost and liberal. This resource lists average national costs for feeding a household of two or four, as well as a per-person weekly and monthly price estimate for feeding an individual based on gender and age. Use one of the monthly amounts as your total monthly food budget depending on which plan falls within reasonable limits of your monthly income.

Use a grocery calculator tool

If you still need help determining the monthly amount you should allocate for food, browse online for a grocery calculator tool or explore the app store for a related app. Penny Pinchin Mom founder Tracie Fobes recommends using the grocery budget calculator available on the Iowa State University website.

Use money-saving apps

Rebecca Lake, contributor with SmartAsset, recommends installing a grocery expense-reducing app. For example, Food on the Table allows you to easily plan your meals for the week based on that week’s sales at a particular grocery store. This is a great option for those who simply don’t have time to browse sale ads from different stores. The app lets you input your family’s food preferences, and then it automatically generates five meal plans based on matching items on sale at a grocery store near you. Favado is another excellent app. It lets you create a personalized shopping list, and notifies you when your favorite products go on sale so you can take advantage of the savings.

Additional tips for reducing food expenses

Part of a budget is prioritizing what you most need while eliminating items you can live without. When it comes to a food budget, there are a few great ways to keep costs low.

  • Forbes contributor Mindy Crary suggests reducing your alcohol consumption. Limit your favorite adult beverage to once a month or for special occasions.
  • Limiting your dining-out expenses is another wise protocol to implement. Focus on reducing frequency rather than dollar amount, Crary advises. “Instead of saying you’ll cut take-out from $200 per month to $100 per month, commit to going less often.”
  • Making meals ahead of time and freezing them is another safeguard against dining out expenses. Crary suggests setting aside three to four hours every 10 days to make a few easy meals ahead of time, such as casseroles, rice and beans, stir fry mixes, and root vegetable medleys.

By creating a simple food budget and applying some straightforward strategies, you can enjoy dining on the cheap while staying within your means. You might be surprised at how easy it is to initiate this financial shift.

Categories: Financial Education

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