Grocery Budget Guidelines
Grocery budgets differ widely between families and individuals because appetites and special dietary needs are so varied. Create your grocery budget based on your own needs, means and comfort level to ensure you stick with it. It doesn't hurt to see how you measure up against national averages and expert guidelines, however, to find out where you might be able to save some money.
Other People Are Reading
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National Average
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Americans spend just under 13 percent of their paychecks on food, according to a U.S. Department of Labor study from 2009. Of the 12.99 percent of annual income spent on food, the average person spends 5.34 percent dining out and the remaining 7.65 percent on groceries for at-home meals. The same study from 2008 breaks down the categories a bit further, noting a .9 percent annual alcohol budget and a 1.2 percent personal care budget, which includes personal grooming supplies you might consider part of your grocery list, such as makeup, shampoo and toothpaste.
Current Expenditures
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Before creating a new grocery budget, track your spending for at least a month to see where your food money is going. You may be spending a lot more than the national average if you dine out more than those surveyed or if you purchase an expensive latte each morning on the way to work. Save your receipts each time you make a purchase, and then add the total expenses together. Divide this dollar amount by your monthly income, and then convert the decimal result to a percentage. For example, if you spend $600 on groceries per month and make $2,700 monthly, you are spending 22 percent of your income on groceries.
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Budget Planning
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Take another look at your saved receipts that you used to track your expenses. Divide them by dining out and dining in, and then categorize the dining-out items by meals versus treats or snacks, such as that latte. Divide the dining-in items into prepared versus nonprepared foods. This will give you a good idea of where your money is going. Look at any expenses you can cut from the dining-out totals, as dining in is often less expensive.
Cash Allowances
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If you are trying to reduce your food expenses, start by giving yourself a cash allowance for dining out, and then limit yourself to this allowance only -- no exceptions. Make your cash allowance 75 percent of your current dining out expenses to encourage yourself to cut down on dining out. For dining in, set out a grocery allowance that is 90 percent of your current expenditure. This will help you reduce costs slightly without cutting too deeply into your needs. Using cash and sticking to that amount alone helps you track how much you have left for the month and eliminates the possibility of credit card and overdraft fees.
Going Shopping
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Check the fliers for your local grocery stores before you make your shopping trips so you know where the items you want are on sale. Go in with a set shopping list as well as a set budget, and stick to it as much as the store allows. Also figure in your time and travel expenses. If you have to go to a different store to save 50 cents on an item, it isn't worth the savings if you spend more than that in gas and effort getting there. Take only the money you need so you won't be tempted to spend extra, or keep only a small reserve stash of cash for those items you can't pass up.
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References
- Photo Credit eggs and milk image by Jeffrey Zalesny from Fotolia.com
