How much money should you budget for food?
A guide to one of the trickiest categories of budgeting
Grab coffee at the office or buy a latte at Starbucks? Pack lunch or step out for a sandwich? Cook at home or order delivery?
All of us make decisions like this around food multiple times each day, and in many cases, those decisions add up to a larger-than-advisable chunk of our budgets. And we know it. Almost 70 percent of Americans say they eat out too much, according to a recent survey that looked at the ways in which we waste money. In fact, the top four unnecessary drains were all food-related. Thirty-two percent of people copped to tossing uneaten or expired food, 25 percent said they spend too much on alcohol, and another 25 percent admitted to racking up higher-than-ideal grocery bills.
So, how much money should you be spending on food?
The answer is frustratingly far from clear-cut. For starters, it helps to put food spending in the context of your overall budget. The average American spends 6.5 percent of his or her household budget on eating at home, and 11 percent if you include eating out. Coming at it from another angle, the largest expense for most households is housing, followed by transportation and then food. In 2015, this amounted to a U.S. average of $17,148 annually for housing, $9,004 for transportation, and $6,602 for food. While your circumstances might differ from these averages, keep the balance in mind: If your food budget accounts for a significantly larger portion of your overall budget, or leapfrogs your spending in either of those other categories, it's probably too high.
Another good test is to spend three or four weeks tracking your grocery bill, along with how much you spend eating out — then compare the results. The national average for a dinner out is $39.40 (New York City comes in at the high end at $48.15, while Austin is lowest at $25.81). For a lunch out, people typically spend $10. Those numbers can add up quickly, and if they outpace your spending at the supermarket, it's another sign that your budget is off.
For more precise guidelines, you can also turn to the U.S. Department of Agriculture's monthly reports on the average cost of eating "a nutritious diet." They're grouped into four different budget levels: thrifty, low-cost, moderate-cost, and liberal. Each report — which draws from the Consumer Price Index and assumes that all meals and snacks are prepared at home — is also incredibly detailed. There are different costs across different age groups for men, women, and children, and for families of two and four. It even includes guidelines for how to adjust the numbers for larger families. Just get out your calculator.
The most recent report, from July, says that a thrifty eating plan for a woman between 19 and 50 years old is $163.30 per month, while a liberal plan would cost $325.80. A man that same age is estimated to spend $184.70 at the thrifty end and $369.10 at the liberal end. A married couple can range from $382.80 to $764.30, while a family of four with young children is estimated to spend anywhere from $558 to $1,091.70.
Once you've done the math, chances are you'll be looking for ways to save. Here are a few tips to get you started:
Eat out less. It had to be said.
Shop less. The more you hit the supermarket, the more you're likely to spend. It helps to plan your meals at least a week in advance and bring a detailed list. Having a list will also help you avoid impulse purchases.
Be sure to check your list against what you already have in the pantry and freezer. This way you know what you need and what you can skip buying. A few times a year, take a pantry challenge where you design meals around what's in the cupboard until it's emptied out.
Use coupons. And don't be afraid to stock up when a nonperishable item is on sale.
Buy fruits and vegetables in season. Sure, you can get watermelon in the winter. But it likely has to be shipped from far away — a cost that'll be passed on to you at the register (plus, the watermelon will lose some of its freshness and nutritional punch during the trip). Think broccoli, cauliflower, oranges, and grapefruit in January, and corn, tomatoes, cantaloupe, and peaches in August.
Speaking of fruit, skip the pre-cut options. And the pre-cut vegetables, grated cheese, and just about anything else that's prepared ahead of time. You're just paying for work that you could easily do yourself.
Eat your leftovers. Freeze extra portions, have last night's dinner for lunch the next day, or get creative about re-purposing ingredients. Leftover meat and vegetables can make a mean egg scramble, or use them in a rice bowl or burrito.
Turn these tips into habits and your wallet will thank you. Your gut, too.