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How much should I spend on groceries to stay on budget?

Grocery store bills can add up. Here's how to keep them in check.

Cynthia Bowman

Contributing Writer at Tally

January 14, 2020

Food and groceries are an important part of your budget. It gets tricky — food costs can vary and it’s easy to overspend on nonessentials. So how much exactly should you spend on groceries? 

The Bureau of Labor Statistics reports that the average American household spends 12-13.6% of their income on food. Roughly half goes to groceries, and the other half goes to eating out. If you’re unsure where to begin, you can start by understanding how to make a budget for groceries by using metrics provided by different government agencies. Then consider your needs and how much you have to allocate toward buying food. We’ll cover how you can determine how much to spend on groceries and ways to save on your supermarket bill.

How much should I spend on groceries?

A good place to start is by looking at your past spending on groceries. This will help you get an idea of how much you spend each month and what an average grocery bill looks like for you. If you usually pay cash for your groceries and throw away the receipts, this can make calculating your monthly grocery expenses difficult. To best track how much you spend on food shopping, consider paying for groceries with a debit or credit card, or save your receipts so you can track your grocery spending more accurately.

Once you determine your average spending on food, calculate your food-spending percentage according to your monthly income. For example, if your monthly take-home pay is $3,000 per month and your grocery and restaurant meals total $300, you’re spending 10% of your income on groceries. In this case, your food spending falls a little below the national average of 12-13.6%.

Having an idea of what your typical monthly grocery bill is can help you take action to make changes in how much you spend. You don’t have to completely eliminate your favorite things from your budget — cut back on other line items such as entertainment or restaurant spending instead.

What the government says you should spend on groceries

Each month, the U.S. Department of Agriculture (USDA) publishes a report about the average recommended amount consumers should spend on groceries. The USDA recommendations take into account the average cost of groceries, estimating what a “nutritious diet” should cost at four spending levels: thrifty, low-cost, moderate-cost and liberal. 

The thrifty food plan is the cheapest. It’s designed for lower-income individuals and families but still consists of healthy and nutritious food. The liberal plan is the highest-cost food plan and almost double the cost of the thrifty plan. The plans only account for groceries and home-prepared meals — takeout and restaurant meals are not included.

Refer to the list below to get an idea of what the USDA currently reports as the average minimum Americans should spend on groceries. The figures are average household costs nationwide. Prices may vary by location and availability.

USDA monthly average grocery costs

Single female, 19-50 years old Thrifty Plan: $165 Low-Cost Plan: $209 Moderate-Cost Plan: $256.10 Liberal Plan: $328.20

Single male, 19-50 years old Thrifty Plan: $185.90 Low-Cost Plan: $240.80 Moderate-Cost Plan: $301.60 Liberal Plan: $369

Married couple, 19-50 years old Thrifty Plan: $386 Low-Cost Plan: $494.70 Moderate-Cost Plan: $613.40 Liberal Plan: $766.90

Family of four, married couple and two children ages 6-8 and 9-11 years Thrifty Plan: $646.80 Low-Cost Plan: $850.30 Moderate-Cost Plan: $1,062.70 Liberal Plan: $1,288.50

Besides the USDA suggestions of what your monthly grocery bill should cost, the IRS has its own guidelines, known as the Allowable Living Expenses National Standards for Food. According to the IRS, the monthly allowable living expenses for food last year were:

  • One-person household: $386

  • Two persons: $685

  • Three persons: $786

  • Four persons: $958

There is no set rule on how much you should spend on groceries. Some families spend more because they elect to buy pricier organic food and locally raised meats. Food costs in some states and cities may also be higher than in others.

Use these national averages to get an idea of how much of your monthly budget you should spend on groceries. Choosing the right amount to allocate to groceries is up to you and how you prioritize food shopping. In the end, how much you spend is a personal decision. Set the goal amount and stick to it to stay on budget. 

How to save money on grocery shopping

Now that you have an idea of what Americans spend on groceries each month, you can target that amount — or try to spend less. Here are nine basic principles on how you can save money on groceries. It takes a little planning but will help you keep your food budget on track.

1. Create a meal plan 

Set a meal plan for the week by outlining the menu of lunches and dinners you’ll be cooking. Review the recipes so you know what you’ll need before you go shopping. Preplanning your menu before the week gets hectic ensures you’re eating a variety of well-thought-out meals so you don’t turn to less healthy food and more expensive alternatives like fast food.

2. Use a list

Impulse grocery shopping can blow your budget. Make a shopping list of what you’ll need before you go. It’s easy to get distracted by special displays and sales once you’re in the supermarket, and you may end up overspending or buying items you don’t need.

3. Look for grocery store specials and use coupons

Search for what’s on sale for the week and capitalize on the discounts. You may have to adjust your meal plan to buy the sale items, but it could save you money. For example, imagine you planned a chili night and want to buy ground beef, but you find chicken on sale for nearly half the price. In that case, you might want to adjust your chili recipe to include chicken instead of beef.

4. Take advantage of sales on staples with a long shelf-life

This is a twist on the tip above. Look especially hard for sales on canned food and frozen food items so you can stock up (if you have space) when they’re cheapest. Make sure to incorporate the item into your meal plan over the next few weeks, though, so you don’t end up filling your pantry and freezer with goods you won’t ever eat.

5. Be flexible and think seasonal 

When meal planning for the week, consider what produce is in season. Those items are usually less expensive. A little flexibility when grocery shopping can save you money. What you’re craving may not be on sale — strawberries in November are typically more expensive than apples and pears.

6. Don’t grocery shop when you’re hungry

Shopping when you’re hungry may cause you to overspend. It all looks delicious and enticing if you haven’t eaten first. And the tempting food samples offered at stores like Costco aren’t necessarily bargain buys.

7. Avoid buying processed foods

Convenience costs more. The most expensive foods at the supermarket are usually pre-cooked, processed, or ready to heat and serve. You’ll save money purchasing whole foods and veggies and cooking your meals from scratch. As a bonus, this tends to be healthier, too.

8. Buy meat when it’s on sale and freeze

Meat can be one of your most expensive items to buy. To offset this, invest in quality freezer bags and buy meat in bulk when it’s on sale. Bag in single-meal portions and label the bag with the date you purchased it to freeze. Thaw it out before you need it by placing it in the refrigerator 24 hours in advance.

9. If you tend to overspend, leave the credit card at home

Using your credit card for grocery bills has advantages and drawbacks. Rewards credit cards allow you to earn points and rewards for grocery shopping, which can be redeemed for travel or cash later. You can also track your grocery spending if you pay with your credit card. But if you tend to overspend, having a credit card available makes it all too easy. Opt to take cash for the amount you’ve budgeted for groceries.

How to set a monthly food budget that works for you

The monthly averages of what Americans spend on groceries are only averages. Some households spend more, and others far less. If you’re still not sure about how much you should spend on your groceries, track what you spend over a couple of months and do an inventory of how much of the groceries you use within the same month. 

Use the information to adjust your monthly food budget for the following month and challenge yourself to reduce the amount of money you spend by 2-3% without compromising your food quality. A small change in your monthly grocery shopping habits can add up in the long run. Take small steps toward your savings goals today to see significant returns in the future.