Spending

How much money should I spend on food each month?

How to be more efficient at the grocery store with this simple budgeting technique.

From impulse grocery store purchases to weekday lunches, morning coffees and restaurant meals, Americans spend a lot of money on food. The monthly cost of food can easily eat up a surprising chunk of your budget if you're not careful.

But it is possible to control these costs and keep your grocery bills more manageable. The U.S Department of Agriculture’s “Thrifty Plan” for food budgeting says a two-person household can eat a nutritionally balanced diet for just $385 per month. And there's no reason your diet can't be tasty and exciting, too, whatever your home income.

Here’s how to create a better grocery budget, opt for more thrifty, low-cost options, and save more money — without having to become an extreme couponer.

How much money to budget for food

One of the easiest ways to manage your overall spending is to follow the 50-20-30 budgeting and personal finance system. That’s when you spend 50 percent of your monthly take-home pay on necessary and usually fixed living expenses, like housing, debt payments and basic groceries; save and invest 20 percent; then use the remaining 30 percent for flexible costs, including restaurant meals and takeout.

According to the Bureau of Labor Statistics, the average American household spends between 12 and 13.6% of its income on food and on groceries outside the home. But when it comes to what you spend on groceries, you don’t have to be average.

Ultimately, the right amount of money to allocate for your grocery budget and your other food expenses is up to you — and it hinges on how much you want to spend on other expenses. It helps to take in the big picture and figure out how much you should be spending each month overall. For example, your restaurants, happy hours and other "fun" food expenses could conceivably take up 30 percent of your take-home pay. But then you’d have nothing left for clothing, entertainment, gifts, or travel.

If you’re not quite sure where to start but want to save, aim to scale back your food expenses by 1 or 2% at first and then make adjustments as needed.

To trim your food costs and save money on food, keep these tips in mind:

Be flexible about your shopping list

Prioritizing cooking food at home can help you save time and money. Still, being efficient and thrifty requires some planning and organization.

Be smart and savvy when you grocery shop. Make meal and food plans around what’s in season and on sale. If beef prices are rising, consider eating more of other low-cost options like chicken or fish. Or, for another low-cost option, consider going vegetarian for at least some of your meals.

And if you find a great deal on your favorite rice (a staple with a two- or three-month shelf life), stock up. Buying in bulk is usually a smart move, assuming you have the storage space to accommodate what you buy. Indeed, there are lots of cheap but healthy foods that are a great value because they can last you a long time.

Just be sure not to buy extra products you won’t eat just because they’re on sale, especially if they tend to go bad quickly. That way, you’ll likely end up wasting both money and food.

Scale back takeout orders and restaurant visits

Even moderate-cost restaurant meals, per serving, are far more expensive, and often far less nutritious, than home-prepared meals are. For instance, a restaurant burger costs an average of $7.07 more than one prepared at home, and a serving of spaghetti in a restaurant costs an average of $8.94 more than one made at home, according to research by Datafiniti.

That’s not to say you should never indulge — just be more conscious about when and why you do it. Even if you scale back by one restaurant or delivery meal per week, you can save $40 or more a month.

Limit your meat consumption

If you’re an omnivore, try going meatless once a week. Beans, legumes, eggs and other protein-rich foods can provide the protein you need at a fraction of the cost of meat.

Bonus: It's cost-effective to stock up on some of those pantry staples, because they're less expensive, they're good for you, and they tend to stay good for a longer time.

Buy store-brand items

If you always reach for brands you know over generics, you could be paying 25% more than you have to.

Instead, avoid going straight for brand names for bread, cereal, crackers, cheese, and other staples and simply purchase the one with the best price. Store-brand products often have the same ingredients but cost much less.

Use loyalty cards, coupons and points

Join grocery store loyalty programs and use coupon apps to score discounts on items you already plan to buy. And if you have a cash-back credit card, check for rotating "bonuses" on food-related categories so you can get rewards for shopping you're planning to do anyway. For example, a card may offer 2% cash back on all purchases but up that to 5% for a limited time for spending at restaurants or supermarkets.

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