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

Grocery store bills can add up, particularly with inflation on the rise. Here’s how to keep your grocery spending in check.

Cynthia Bowman

Contributing Writer at Tally

January 14, 2020

Food and groceries are an important part of your budget. And these days, with inflation on the rise, it seems like food prices are rising higher and higher each week. In fact, the data shows that grocery prices increased by 11.9% between May 2021 and May 2022. That means that if you used to spend $200 a week on groceries, you’re now spending around $223.80 a week. 

We all want to eat well and be healthy — but how can we buy groceries without spending a fortune? 

This guide will go over grocery shopping on a budget. It will also provide guidelines on how much the typical household spends on food. 

So how much exactly should you spend on groceries? 

In 2020, the Bureau of Labor Statistics reported 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. This is likely to increase given more recent data according to the BLS.

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, ways to save on your supermarket bill and more in this guide. 

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, and 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 household monthly take-home pay is $6,000 per month and your grocery and restaurant meals total $600, 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, and prices may vary by location and availability.

USDA monthly average grocery costs

Single female, 19-50 years old 

  • Thrifty Plan: $231.40 

  • Low-Cost Plan: $247.50 

  • Moderate-Cost Plan: $302.70

  • Liberal Plan: $387.10

Single male, 19-50 years old 

  • Thrifty Plan: $288.30

  • Low-Cost Plan: $285.00

  • Moderate-Cost Plan: $357.30

  • Liberal Plan: $436.70

Family of four, married couple (19-50 years old) and two children, 6-8 and 9-11

  • Thrifty Plan: $932.20

  • Low-Cost Plan: $1,009.30

  • Moderate-Cost Plan: $1,255.20

  • Liberal Plan: $1,520.90

This data is taken from the May 2022 Official USDA Food Plans. Full details on the Thrifty plan can be found here, and the low-cost, moderate-cost and liberal plan details can be found here

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: $431

  • Two persons: $779

  • Three persons: $903

  • Four persons: $1,028

Of course, these are just average figures published by the government. 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 also vary by location — they will be higher in some states and cities than others.

You can 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 to apply to 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. In turn you’ll be less likely to choose unhealthy food and more expensive alternatives like fast food.

2. Use a list

Impulse grocery shopping can make it hard to go grocery shopping on a 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 being flexible 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. Reduce food waste

Data shows the average American household throws away around a third of their food every year. For a typical household, that’s around $1,500 worth of food thrown in the trash bin annually (or around $125 per month). If you can reduce your food waste, you can save a lot of money and help the environment. 

10. Shop in bulk — for certain items

For nonperishable items, shopping in bulk can produce significant savings. Membership stores like Costco and Sam’s Club can be a great source for grocery shopping on a budget. Just be cautious with perishable food, as it can be difficult to get through the bulk sizes before the food spoils. 

11. Utilize savings apps

There are a variety of smartphone apps that you can use to save money on groceries. For one, most grocery stores have their own apps that you can use to save coupons. Then there are third-party apps like Ibotta, which give you cashback for purchasing certain items, and Coupons.com, which offers manufacturer coupons to use in-store and online.  

12. Cook more items from scratch

If you have the time in your schedule, you can reduce grocery spending by cooking more from scratch. Instead of buying frozen pizzas, start making your own dough (or simply buy cheaper premade pizza crusts). Instead of buying canned beans, cook your own from dry beans and freeze the leftovers. 

13. 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

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 food 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.

Wrapping up

Grocery shopping on a budget can feel tricky but there are several ways to keep costs down. Experiment to find what works best for you, and be sure to check in on your spending habits every few months to stay on track. 

Is credit card debt holding you back from your financial goals? Tally† may be able to help. Tally helps qualifying Americans consolidate credit card balances into a lower interest line of credit. 

†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.