Estimated reading time: 7 minutes
One of the top questions I get asked is, “How much should my grocery budget be?” and I reply, “How much are your current monthly grocery costs?”
Today, I want to explain how to calculate your monthly grocery costs to help save on food costs.
Budget Food Costs One Step At A Time
Before determining your grocery budget, knowing what your current situation is costing you is essential.
My question often goes unanswered, or I get a response of “I don’t know” because grocery shopping is simply buying food for the week and paying the bill for some consumers.
Unfortunately, budgeting and frugality are generally not part of the shopping trip until it becomes necessary for some people. Don’t make this be you.
A food budget should be essential for everyone unless you have unlimited income where money is no object to you. I’m afraid that not many of us reading the blog are that fortunate.
Typical grocery costs per month will differ from person to person depending on many factors, such as the size of the family, income level, health, and special diets.
New Year, New Expenses
It’s high season for budgets now that the new year has arrived and people want to get back on track financially, or they’ve set goals for the year to pay off debt.
The blog is busting with people looking for answers about food costs and budgeting, which happens every year.
Although I do my best to answer every email or message I get, sometimes it’s easier to write about what most readers ask me.
I do my best to explain how we budget and what we did to arrive at our current numbers so the readers will have some benchmark idea of what to do.
Learning From Mistakes
I’m not saying our way is perfect, but it has worked for us and contributed to helping us pay off our mortgage in 5 years.
A typical month’s grocery expenses for our household is $235 for 2 people and a toddler plus a $25 stockpile budget.
Although this may seem like a tight budget, remember it depends on many factors that should pertain to your situation.
Even then, this year’s budget may not work for us with price increases across the board, so we must review our situation before it gets out of hand.
Often, we learn from mistakes because that’s the only way we understand where we go wrong.
Before you can start any grocery budget, I will share a few things you should do to be a successful shopper.
How Our Grocery Budget Was Created
We have learned so much about budgets and shopping that I hope to encourage people to invest more time in learning how to save money on groceries.
With the prices of groceries slated to go up this year, many of you have told me it’s time to buckle down and get serious with your grocery budget.
I don’t blame you one bit.
Document Monthly Grocery Costs
You first need to track your expenses if you don’t know what you spend at the grocery store every month.
We realized we were spending too much on food even though we thought we were saving money using coupons.
Even if you are on a fixed income, you need to know how much money you can spend freely without going into debt.
No one wants to create debt by buying food or paying interest on a credit card because you are spending more than you can afford.
Take a month to document everything you buy at the grocery store in a typical shop without thinking about money unless you already have a set amount to spend.
You might not even know if that amount is enough, but you will know when you’ve done these exercises.
Remember that the monthly food total will be an average grocery cost because there could be some months when you spend more money to buy those one-off items.
Do you know when you run out of ketchup or horseradish? Stuff like that.
Create A Grocery Price Book
Typing out your weekly grocery shop and reviewing what you are buying, including the prices, will give you an estimate of how much your monthly grocery costs are.
Creating a grocery price book lets you know the regular price, sale price, and prices at other stores. It’s a reference guide to help you decide the best places to buy the food you need.
You may or may not be shocked by this number, but if you are shocked, you must get on a grocery budget that works in your favour.
I’ve chatted to many fans over the years who said they couldn’t believe they were spending $1200 a month on groceries for their small family.
Shocking Results: Reducing Monthly Grocery Costs
One reader even wrote a blog post for CBB to share how she cut her grocery budget from $1100 monthly to $600 in just 6 months.
Understandably, this post is popular, meaning many people struggle with food expenses and want to learn how to make changes.
Below is a summary of how we figured out how much money we needed to save each month for food after we got paid.
Stop Estimating Expenses
I know you’re sick of hearing it, but you are left without a budget and accurate numbers.
You can’t complain about the cost of food if you aren’t budgeting or at least know how much you can spend on monthly food costs.
If you go to the grocery store and spend money and complain that you aren’t buying much, maybe you should review how you shop and how to get more out of your money.
Once you find out how much your monthly grocery costs are, you need to figure out if you should add more to your grocery budget allowance or spend less.
Typically I would track expenses for 2-3 months to get the best idea, but if you are time-strapped, then one month will do.
If you can pull off a year of documenting your monthly grocery costs, you will have an even better number for the start of the year.
Even then, prices change, so it’s just an estimate but a number worth its weight in gold regarding your financial health.
If you have no idea about your monthly grocery allowance because you don’t budget, I suggest downloading my free budget or finding a budget that works for you.
It takes no time to fill in a budget that will give you numbers that will change your financial life if you stick with it.
By now, you should know how much you can afford to spend at the grocery store.
What should you do next?
Learning More About Your Shopping Expenses
If you found that you were spending too much money while documenting monthly grocery costs, I recommend you continue tracking your shops.
Not knowing is like pulling the covers over your budget and telling it to do what it wants.
That always ends badly or costs you the money you could have saved towards retirement or to put towards your education, debt, or other life goals.
If you only want to find out how much money you spend on food every month, you must document only what you spend on food.
Some people like to split their grocery category into a few categories like Food, Pet, Health, Beauty, and Cleaning supplies.
This is because they can track how much they spend in each category to give them an accurate number.
We chose to do this a couple of years back, and it has worked out great for us.
Two Things You Can Do
So before you search online about how much you think your grocery budget should be, you need to complete two tasks.
- Research Spending Habits and Food Prices
- Use a Food Budget
Even trying to estimate or use budget costs that other families use will never work. Every situation is different.
It’s easier to say that food costs you more money, and you keep paying for it, but when you realize how much you can save, you’ll never turn back.
If you don’t care, you wouldn’t be here right now, so don’t click x and leave.
Read my Ultimate Grocery Guide for more inspiration about saving money on groceries.
Discussion: How did you first find out how much you were spending on groceries before you started to use a budget?
Please leave your comments below.
Thanks for stopping by,